How to achieve your short-term savings goals

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We all have money goals. They could be ambitious, like saving for your retirement or paying off your mortgage. They could be a bit smaller, such as saving for a new car, holiday, or maximising your emergency fund. 

But whatever they are, your success in achieving your goals can come down to your ability to stick to a budget and your saving strategy. We’ve already tackled the issue of sticking to a budget, so now we will look at strategy, specifically for short-term money goals.

What is a short-term goal?

First, let’s clarify what we mean by ‘short-term.’ These goals are the ones you would aim to achieve in a few months or within the next five years. They are your more immediate expenses such as; an emergency fund, holidays, wedding, home improvements, cars.

Finding the right account for you

When it comes to short-term saving goals, it could be worth considering an easy-access savings account, a cash ISA, or a fixed-term savings account. If you’re not sure which type of account is right for you, you can compare the benefits: visit our ‘How to choose a savings account’ page to find out more.

Money you hold in savings accounts is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per person, per institution. Savings accounts could also offer more stability than investments, as they’re not affected by the ups and downs of the stock market.

But investing in stocks and shares could be a helpful part of a long-term strategy if you have more time to weather any potential losses, while taking note that there are still risks when it comes to investing. It may not be the best fit if you have a shorter time horizon for your money goals. 

Saving in cash can also make it easier to access your money, which can be a consideration for short-term needs.

For those reasons, savings accounts can be more attractive for short-term goals. Although rates of return are usually lower than on the stock market, your money is safe, will gain interest, and could be easy to access. 

The final word

All the savings options we’ve looked at could help you achieve your short-term savings goals. 

If you think you’re likely to need immediate access to your money, then you could consider the flexibility of an easy-access savings account. If this isn’t something you need, a longer-term option may be better suited for your needs, such as a cash ISA or fixed-term account. 

Mixing and matching may be better for you. Your financial goals are as individual as you are. There is no one-size-fits-all answer. 

The content in this article is for information only and is not advice. All content in this article was accurate on the date of publication shown above.

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