How to Start Saving

Set your financial goals, consider your time horizon and calculate your starting savings rate

Holly Cook 18 September, 2012 | 8:00AM Alanna Petroff

Before you embark on your saving and investing career, there are a few key decisions you will have to make:

What Are You Saving For?

People save and invest money for a variety of reasons, including saving for a car, saving for tuition fees or saving for a child's future. It is helpful to make a list of your financial goals and then calculate how much they will cost.

Let’s assume that you’re saving for retirement. What does retirement look like? Does it look like a continuation of the status quo? Or does it look like an opportunity to visit far off places and spend six months of the year on a cruise ship? If it’s the latter, then the income your retirement is going to require will likely be substantially more than the income you might need if you plan to work part-time well into your 70s and become self-sufficiently green-fingered. Try calculating what it will cost you each year to live this imagined in-retirement life.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Holly Cook

Holly Cook  is Managing Editor of Morningstar.co.uk

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