Spending is a part of living, everyday we live we spend. We spend on things we can predict like bills and food, and on the unexpected.

First step is to spending well for the short term  is to plan your spend before it happens. Yes you and I can predict every single thing we are going to spend on and ensure the money is available in cash before we spend.

How do you plan for the short term?

I thought you would never ask.. it’s by saving! But not your usually saving where all your save

erodes with inflation (been there, got the t-shirt)! We are going to make our money work for us even if we need it to remain sitting pretty and risk free in cash.

Let me tell you why I plan for the short term and why you should do so also.

your short term goals need easy access to your cash in less than 5 years and on short notice (so investing is not a great option -too unpredictable or the short term).

The best way to spend well while achieving your short term goal is to save well for them. But the thing is there are so many saving options out there, and it could be confusing to know which one best suits your needs.

But, let me put your mind at ease first.

Savings accounts are covered by the Financial Services Compensation Scheme (FSCS) up to £85,000, which means you’re protected if your bank goes bankrupt.

Let me show you how to save well

I am going to tell you all the types of savings I had and have and some which I wish I knew about so that you can save well now and achieve your short term goals without tears or stressing out.

Here are my top five ways to save for the top 5 short term financial goal

Note the best interest rates are reserved  for you if you leave your money saved without withdrawing it.

1. Saving for short notice unexpected needs e.g to fix your phone, your car, your boiler or pay bills if you lose your income.

Open an instant access savings account.

This is the basic saving account available at every bank. It allows you to save as much as you like whenever you like and withdraw your money as you like without any penalties. You can usually open these savings accounts from as little as £1. However, they usually come with low variable interest rates and you may have to pay taxes on the interest.

I save for unplanned expenses (and emergencies) in one of these instant access savings accounts and I receive an interest of 0.3%

2. Save for a particular event or occasion or specific goal e.g to pay for school fees, a holiday in 6 months, a party you are hosting in 60 days, your wedding venue in 3 months

Open a Notice Savings account.

This type of accounts are also available at most banks. It allows you to save as much as you like at a higher interest rate than the instant access savings account. It requires a minimum amount to open a notice savings account, usually around £1000. And you are required you to give between 1 month to 6 months notice before you withdraw your money. Otherwise you will get penalised and not get your full interest, so it’s best to use it to achieve  As a rule of thumb, the more notice you’re required to give, the higher you can expect the interest rate to be.

This type of account works well if you want to lock your money away for a few months to achieve a specific goal by a target date. Interest rates usually start from 1.3%.

3. Saving for a particular event or item when you have regular income e.g a new car, holiday, or build up your savings fast, remortgage payment or school fees.

Open a regular saver account

With this type of account, you have to commit to paying regular monthly deposit usually between £25 and £500 per month for an agreed period of time, typically 12 months. This type of savings account usually has higher interest rates than the basic instant access or the notice savings account. However if you miss a month’s payment you will be penalised and may not get the agreed interest rate. Also you might not be able to make any withdrawals (or only a limited number of them) until the agreed term expires.

I used a regular savings account with an interest of 5% to fund my remortgage payment.

4. Saving on low income e.g. Get free money when you save for any goal

Open Help to Save account

This is a type of savings account  backed by the UK government which helps people on low income get a 50% bonus on all the money they save over a 4 year period. You can save as much as you can up till £50 per month and can withdraw the money when you want. To be eligible you have to be receiving Working Tax Credit or receiving Universal Credit. You can only ever have one of these accounts, and the bonuses are paid at the end of the 2nd and 4th year.

5a. Saving for your first home when your young and you are not buying in the next 12 months

Open a Lifetime ISA (LISA)

This type of account is also backed by the UK government to help young people save towards your first home or retirement only. Anyone between the ages of 18 and 39 can open a LISA.

You get a 25% monthly bonus on all money you contribute into the account to £4000 per year, and this bonus keeps getting paid until you are 50. This means that you can get the max bonus of £33,000 free if you open it at 18, and max it out until you hit 50. Any withdrawals for anything other than your first home or retirement will be penalised and you lose the 25% bonus. You can withdraw the money to buy your first home up to £450,000 after your LISA has been open for 12 months.

I wish I knew about this!  My husband and I would have received at least £6000 worth of free money.

5b. Saving for your first home no matter your age and want to buy ASAP.

Open a Help to Buy ISA

This is great at any age above 16, who would like to save towards a mortgage deposit for their first home. You still get the 25% bonus as with the LISA. However, you can only contribute a £200 monthly max, and £1000 lump sum in the first year only. However unlike the LISA, the money can be withdrawn once you have £1,600 saved (which can be achieved in as little as 3 months).

I heard about this but was confused about the terms and conditions. And couldn't find anyone who could clarify how it worked. I understand it now, but it's also too late for me now.

Note. You can open both Help to buy ISA and Lifetime ISA at the same time but you can only use one towards your first home.

The overall ISA limit is £20,000 in the 2019/20 tax year. You are allowed to split this between a LISA (up to the maximum £4,000) and put the remainder in any other ISA, e.g. cash ISA in the same tax year.

Hope this post helps you save better for your short term life goals. I'm not a financial advisor but I’m sharing what I have learned on my savings journey in case it could help you.

If your next question is which account you should open.

Here's my suggestion:

1. Open a standard easy access savings account with your bank for emergencies

2. Open a high interest regular savings account for specific goals - school fees, holidays, new car

3. Open a lifetime ISA if you are above 18 even if you are not ready to buy your first home or retire and get your free 25% bonus..it's free money!

4. Definitely open a help to save if you are eligible and take advantage of the 50% top up bonus

Yes, Open them all. I have several saving accounts for myself, my family and my kids.

Any other questions send me an email or leave a comment below.

Now I have a question for you, which account are you going to open in the next 48 hours? Reply me in the comments :)