How to Make a Personal Savings Plan

A personal savings plan gives you a clearer sense of what you’re working toward and how your money supports those goals. Without one, it’s easy to spend on conveniences or subscriptions that don’t add much value to your life. By outlining what you want to save for, estimating the cost and setting up a structure to reach that target, you create a framework that makes consistent saving feel more intentional. Over time, the mix of defined goals, manageable monthly targets and automated deposits can help you build momentum toward the milestones that matter to you.

A financial advisor can help you create a personalized plan for savings and investing your money. Connect with an advisor for free.

Why Make a Savings Plan?

A savings plan gives shape to your goals and encourages more purposeful decisions with your money. Even if you’re naturally careful with spending, it’s easy to keep paying for things you don’t truly use or need, especially when those expenses renew automatically. Reviewing recurring charges, insurance coverage or other routine costs can reveal areas where small adjustments free up extra cash.

Creating a plan can also shift your mindset. When you identify clear goals and track your progress, saving becomes something you’re actively working toward rather than something you do only when it happens to fit your budget. This sense of direction often makes the process feel more motivating and manageable.

How to Create a Personal Savings Plan

SmartAsset: How to Make a Personal Savings Plan

For a personal savings plan to be successful, there are specific steps you should follow to help you save more. Follow these four to get started:

1. Identify Your Savings Goal

The first step to a successful savings plan is deciding why you are saving. For instance, you might save for emergencies, a vacation or a down payment on a home. Your goal can be anything you choose, as long as you have something clear in mind.

You might have more than one thing you want to save for simultaneously. Some online savings accounts have “buckets” that let you maintain multiple savings goals. However, you will contribute less to each bucket each month if you have more than one savings goal.

2. Set a Monthly Savings Target

To decide how much to save each month, you should first determine how much money you need. For example, suppose you want to take a vacation but don’t know how much it will cost. If you know you will have to fly and stay in a hotel, you can look at travel booking sites to estimate the cost. You can also give yourself a daily food budget, like $50.

Other expenses might include things like renting a car or buying souvenirs. Suppose that when you add everything up, you estimate your cost to be around $2,500. You might decide to save a little extra, but this gives you a solid baseline to work from.

Now, suppose you want to take this vacation 12 months from now. A goal of $2,500 works out to a savings of around $208 per month. Now it’s time to spring into action.

3. Reduce Expenses or Increase Your Income

Now that you know exactly how much you must save each month, you can start looking for some extra dollars. If you do your banking online, you can comb through your bank and credit card statements to look for savings opportunities. Perhaps you have subscriptions you can cut or are paying too much for a service. Or maybe you can cut back on dining out. Making a few small tweaks here and there can add up.

If you have cut everything you can and you still haven’t reached your savings goal, you might have to increase your income. There are many ways to do that, but it’s often easiest to ask for a promotion or apply for a higher-paying position within your company. If that isn’t possible, you might consider working a second job. If you only need an extra hundred dollars or two per month, a few extra hours per week might be enough.

4. Automate Your Savings

Once you have the extra money you need each month, the last step is to automate. Many online savings accounts let you move money from your bank account automatically. As a result, you won’t be tempted to spend the money as the transfer will happen in the background. You might even forget about the transfer entirely.

Plus, online savings accounts often have the added benefit of paying higher interest rates than traditional banks. You can save as much or as little as you want in an online savings account. And as mentioned earlier, some have savings accounts have buckets so you can save for more than one goal at a time.

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Bottom Line

Whether you struggle to save or are naturally frugal, a personal savings plan can be invaluable. The goal is to make it specific and determine exactly how much you need. That way, you can take steps to cut back on expenses or increase your income. Lastly, you can automate your savings to make the process seamless.

Tips for Saving Money

A financial advisor can help you work through your needs and put together a savings and investing plan for your unique situation. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
The best savings accounts pay some of the highest rates and often do away with costly fees. See SmartAsset’s list of the best savings accounts to find one that’s right for you.