How to set SMART SAVING GOALS & get the rewards in 30 years or less

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Cocktail-napkin math tells us that if you save 20% of your income and invest it, you’ll have a million dollars in 25 years. But that’s easier said than done.

Many of us struggle to set savings goals and maintain them for the sake of our future well-being. This is a missed opportunity that can be avoided with goals, discipline and handling negative emotions, such as the ones urging us to go to shopping therapies. In fact, according to a study by Invesco, only 35% of Europeans have detailed financial plans with specific savings goals. 

We all want to be one of those people who are able to save for our future, but it can be challenging to maintain those intentions when unexpected expenses arise, bills need to be paid, or unexpected social activities pop up. 

Let’s be practical on how you can set your own personal savings goals and achieve them!

Know your why!

Before you set any savings goals, you have to know your “why”. Why do you want to save? Why is it important to you to set aside money? Knowing why you want to achieve your savings goals can help you stay motivated when it gets tough. Knowing your “why” can be applied to many aspects of life, not just saving money. When it comes to saving money, knowing your “why” can help you set realistic savings goals for your life and your financial future.

If you want to put money away for a vacation in a couple of months, you may decide to put 20% of your income towards that vacation. While that’s a great goal, it may not be the best idea if you only have a couple of months to save that money. Knowing why you want to save that money can help you set more specific goals. If your “why” is to have money for a special vacation, you may want to increase the amount you put away each month so you can have enough money when the time comes, and plan in advance.

One of the most important why(s) for saving is financial independence and that alone is more than enough reason to set and stick to your savings goals no matter how tough the going gets. Financial independence might not always mean having the financial capacity to afford all things, but the financial strength to afford the needful things even when they come as an emergency. You don’t want to ever find yourself in a health situation where you need money urgently, but do not have an extra penny for your bills. 

Set SMART goals

After you know why you want to save, it’s time to set your goals.

SMART goals are an acronym for specific, measurable, attainable, realistic and timely goals. Your savings goals should meet all of these criteria in order to be effective. 

For example, if your goal is to save $1,000 for a vacation in two months, that may not be realistic if you only bring home $500 a month from your job.

You can think of SMART goals like this: 

“If I achieve this goal I will…” 

You may have heard the phrase “break down big problems into smaller ones”, when it comes to solving problems or completing tasks on time. The same idea applies here. 

Break down your big savings goals into smaller ones so they are more manageable and easier to achieve. If one of your SMART goals is to save up enough money for a house by the end of the year, you can start looking for one in January 2023 instead of November 2022 when the holidays come around bringing in off-mood. 

You can break this goal down even further so that each month has its own SMART goal which will help keep things more manageable and allow you to feel more accomplished each month. 

Your goals can be SMART for more than one category. If you have a goal like “I want to save up $5,000 by the end of the year so I can buy my husband a new camera for his birthday” then it would be a SMART goal in both categories.

How do you come up with SMART goals?

Now that you know what SMART goals are and how they can help you achieve your financial goals and independence, how do you actually come up with them? 

There are several ways. 

You can either sit down and brainstorm them on your own or you can use a tool such as the Savings Plan Calculator which can automate it for you based on what you say. 

You simply enter in how much money you want to save every month and it will give you savings targets broken down by month so that each month has its own specific target which is easier to manage and keep track of than a single large target for all 12 months combined. 

To help get started, here’s a list of potential categories for your SMART savings targets:

What requires long-term saving & planning?

Home Improvement 

Saving up enough money to fix something around your house like replacing broken windows or repainting the walls.

Top Vacation

Saving up enough money to take a vacation either by yourself or with your family. Think about it, would you rather save &invest?

Car Repair 

Saving up enough money to pay for a car repair like fixing a busted radiator hose or fixing the brakes.


Saving up enough money for your wedding such as paying for the venue, the food and drinks for your best people, and the flowers and decorations.

Emergency Fund 

Creating an emergency fund that can cover unexpected expenses like car repairs, medical bills, etc. without having to resort to credit cards or other debt. You could even set this goal higher than what you need in case you need even more than you anticipate.

If you have an emergency fund of $5,000 it’s unlikely that you’ll ever need more than that but if something unexpected happens then at least you know that you have this extra cushion of protection against financial disaster. 

Many financial experts recommend saving at least six months’ worth of expenses in an emergency fund but if this is too much then start small with say three months’ worth of expenses.


Here we go again. Investing can be a long-term goal but it’s one worth considering if your retirement is still far away or if you imagine big. If investing is something new for you then check this guide on investing in cryptocurrency. Fidelity predicts that 1 Bitcoin could be worth $1 dollars in 2032. That’s a lot of money, and you sure want to have your own share in it, but that’s not possible without some investment in crypto! 

Whether this means continuing with your current education or going back to school for a fresh college degree, investing in your education can help you improve your skills and get a better job. You might never need to show your degree actually if you’re achieving results in real life.

If this is something you’ve been thinking about doing then start planning now to take the necessary steps.


If you have hobbies that cost money but are still important to you then consider setting aside some money for these activities on an ongoing basis in order to ensure that they stay affordable and enjoyable. After all, it’s about enjoying life to its fullest.

Medical and Dental Expenses 

It’s like the emergency fund above but we want to emphasize it. The cost of medical care continues to rise so having an emergency fund set aside specifically for medical expenses is recommended. 

You don’t want unexpected medical expenses eating into your retirement savings, so keep enough cash on hand so that if an emergency does happen it won’t be devastating financially. Or look out for investment you can easily cash out or a portion of it.

Individual and Family Emergencies 

Once again, it’s about your future well-being. If you have an individual or family emergency then you want to make sure that you can deal with those issues without having to take on debt or without having to borrow from your retirement savings. Spending on credit cards for 16% of APY can add up to the devastation. 

Having an emergency fund can help in these types of situations, especially if the issue is relatively minor and can be resolved quickly, and if your country is not as well-prepared for your situation and serving your medical issues regardless of anything, as a top priority.

Create a savings plan

Now that you’ve set your goals, it’s time to create a plan for achieving them. There are a number of ways you can do this. You can use a compound interest calculator to help you figure out how much money you need and what your savings rate needs to be to reach your goals. 

You can also use a spreadsheet or budget software like Mint to help you figure out how much you need to save each month to reach your goals. If you want the budgeting process to be more visual, try creating a pie chart showing how much money is going towards each of your different expenses and savings categories (e.g., housing, transportation, food, etc.).

Just keep being into it. Whatever method works best for you, is the method that will work best for you. The key is making sure it works for YOU and not someone else!

Figure out where your money is going

The next step in creating a savings plan is figuring out where the money goes each month. There are two main ways that people determine where their money goes: 

they either use an app or they keep track on paper (or both!). 

Most people have no idea where their money goes until they start keeping track of it.

Once they start tracking it, they’re shocked at how quickly it adds up over time! They’re also shocked at how much money they waste on things like eating out, paying late fees at the bank or gas station, and buying things on impulse.

There are a lot of different apps out there that can help you track your money. 

Mint is one of the most popular ones out there, but you can also try MoneyWiz, You Need a Budget (YNAB), Personal Capital, or Level Money. 

There are also other apps for tracking all kinds of things like your spending habits, health habits, sleep habits and more! There’s an app for everything!

If you prefer to keep track of your spending on paper (or both!), here are some tips to get you started:

  • Get a small cash envelope and put it in your purse or wallet. 
  • Every time you spend money on something, put the amount of the purchase in the envelope – like spare change, something we do at SAVI. 
  • At the end of each day or week (depending on how often you want to count your cash), transfer the money from the envelope into a notebook where you record all purchases made that day/week. It’s coming soon on auto-pilot with SAVI, connected to your bank account and spending spree thanks to open banking. This way, at the end of each week/month/year, you will have an accurate record of how much money was spent during that period and can use that information to create a monthly budget for the next month/year! 
  • If you want to be more organized about keeping track of things like late fees or ATM fees from other banks, as well as foreign currency exchange rates.  

Once you have a good idea about where all your money is going, you can start making adjustments to where you spend your money. Perhaps you can cut back on eating out or save more for retirement by reducing the amount you spend on clothing. It’s up to you!

Utilize automation

What is savings automation?  It’s the process of using a computer, smartphone app, or another electronic device to automatically move money from your checking account to a savings or investment account. 

This can be set up to occur at the same time each day/week, every time you make a purchase after your paycheck is deposited, or any other way you choose. This is one of the things we build as a startup at SAVI

Automation can help you reach your goals faster, with less hustle involved. Easy, peasy.


By putting a portion of each paycheck towards your savings goals, you’ll be contributing a larger amount of money each month towards those goals. You can just spend from a debit card and save the spare change.

What are some ways you can automate your savings? 

You can set up an automatic saving plan with your bank or you can utilize tools like Digit or Acorns (if you’re in the USA) to automatically set aside money for your savings goals each month. 

  • Important – don’t overdo it. When setting up automatic savings, ensure you’re not putting yourself into a situation where you’re depriving yourself of something important. Just keep track of your automating tools, until it starts making sense. Automating your savings can help you stay on track, but you need to make sure you’re not skimping on essentials like food, water, or shelter.

Celebrate and evaluate!

Once you’ve set your savings goals and created a savings plan, it’s important to celebrate the progress you’ve made and evaluate the progress you’ve made towards your savings goals. 

Celebrating the progress you’ve made towards your savings goals can help keep you motivated and help you maintain your progress. It can also help relieve some of the stress that comes with setting and meeting savings goals. You are doing a great job just reading this and planning. 

How can you celebrate the progress you’ve made toward your savings goals? There are tons of ways to celebrate your progress towards savings goals! You can reward yourself with a new purchase, take yourself out to a fancy dinner, or do something that makes you happy.

You can also share your progress with others by posting it on social media or talking to friends and family about your progress, in a motivational way of course. 

Self-evaluation is just as important as a celebration when it comes to setting savings goals.

Keep track of your progress

As you’re setting your savings goals and creating a savings plan, it’s important to track your progress. Tracking your progress can help you stay motivated and can also help you figure out where you need to make changes or improvements to reach your savings goals. What tools can you use to track your progress towards savings goals? Go back to it, like reading a book or a quote that really inspired you. 

Write down your progress separately and make notes about how you can improve.

The bottom line for saving hard

Saving money can be challenging, but it’s an important part of any financial plan, for anyone’s future. Whether you’re setting aside money for a rainy day or funding a long-term goal like retirement, it pays to put some money away. The good news is that it isn’t hard to do, and you don’t have to deprive yourself in the process.

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