It’s no secret that your financial priorities change over the course of your life. In your teens you might save for a car, in your 30s you might save for your kids’ education, and by your 40s and 50s you’re more focused on your retirement. But to achieve any of these goals you need a solid savings plan. One that keeps you on track for your long-term goals, and one that will see you through any economic downturns that may happen along the way.

Consolidating your accounts is a simple solution, which makes it a good place to start. It’ll save you money on fees and reduce the risk of losing track of accounts and incurring charges. Those savings might seem small, but they add up fast.

Following these five essential steps will help you create a successful savings plan:

Identify what you are saving for

You can’t get to your destination unless you have a road map. Having a clear objective of what you are saving for is the first step, whether it’s for a family vacation, a TV or second family car. People know they have to save, but if they can visualise their financial goals, it really helps bringing in the motivational element to the table. It also helps to write down each objective with the amount you want to save and a target date for reaching your goal.

Determine how much you can save

Whether you make Dh10,000 or Dh50,000 a month, you need a snapshot of how much you’re spending. That’s where a budget comes in. Once in place, you can determine how much you can allocate to savings or if you need to rein in your spending. For instance, if 5 per cent of your income is all you can afford — start there. In time, you can increase this amount. If you’re unsure how much you should be saving, speaking with an adviser who can help you build a budget and portfolio to show you ways to save that you may not have considered, like consolidating or restructuring debt to lower your interest costs is another way one could go about this.

Choose appropriate solutions

There are many ways to save and invest your money, including savings accounts, plans — the list goes on. The trick is picking the one that works for you. Choosing the right savings vehicle will depend on how much you can save, how frequently you plan to add to your savings, and how quickly you may need to access that money. For short-term goals, focus on safety and liquidity rather than growth. Savings accounts and high-interest savings accounts are good options. Picking the right saving plans for a medium or long term goals can be more challenging, as you need to strike a balance between protecting your assets and growing them to offset inflation. As a general rule, the more time you have to reach a financial goal, the more investment risk you can afford. More risk means more volatility, but if you have 15 years or more to meet your goals, you should be able to ride out any market downturns.

Make it automatic

If you don’t see the money, you’re less likely to spend it. Once you know how much you want to tuck away — say 5 per cent or 10 per cent of your salary, set up an automatic transfer to a separate savings account or investment account as soon as you’re paid. Even small amounts count. For instance, $200 (Dh735) a month earning 2 per cent annually will grow to $2,426 after the first year, to $7,424 after the third year, and to $12,625 in just five years. While this may feel like this is pinching your pocket initially, it is eventually pain-free saving.

Monitor your progress

Take a few minutes every few months to see if you’re meeting your savings goals and ensure the performance of your plans are in line with your expectation. In time, if one gets a salary increase, it is more beneficial to add it to your savings and not looked at as an opportunity to spend more. There’s more to saving than cutting your spending and setting aside that money.

The key to any savings plan is to start early. A little bit saved each month starting at age 25 beats a lot saved every year starting at age 50. Every day you wait to put a savings plan in place could affect the lifestyle you want in the future. In this case, a stich in time does save nine!

According to research undertaken in 2014 among employees in the UAE by MetLife, one of the region’s leading insurance companies and a global provider of insurance, annuities and employee benefit programs, 60 per cent of employees feel they are falling behind in their savings objectives and 61 per cent of employees are concerned they will not have enough to live comfortably in retirement.

Theo Alexandrescu, General Manager, MetLife, Gulf said: “We know from our own research that employees in the UAE are looking for help with financial planning and support in making the right decisions. People are not saving enough or starting early enough — or both — and this is leading to a probable shortfall in retirement savings. This issue is highlighted further when you consider that around one-third of UAE employees are planning to retire before the age of 60, and three-quarters before 65, leading to financial worries and stress-related health concerns.”

— Tooran Asif is Head of Personal Banking, Mashreq.