In this article we'll learn how to go about setting realistic savings goals. The key is to start with small goals as each time you successfully reach one you'll be encouraged and motivated to continue on saving more and more.

There's a strange sensation in life where it seems that the more you earn the bigger your expenses grow almost pro-rata. The thought of saving enough to afford an overseas holiday or even a house deposit can seem like pretty mountain to climb.

To break the cycle you need to set targeted and specific goals which are bite sized, realistic and manageable. A major factor in successful saving is motivation, it's extremely important to have strong reasons to save and to be excited about what you're going to be able to do with the money. You should feel passionate about it.

If you are not used to saving then it's particularly important to start with a small saving goal, this way you're much more likely to achieve it and experience the payoff at the end. Draw up a plan for when you would like to achieve your goal and work backwards to calculate how much you'll need to save each week in order to achieve it.

It's important to write these plans down so that everything is clear. Avoid keeping the money at home as it's just too easy to access it should you have moments of weakness where you lose your self control. Instead keep it in a separate bank account set up especially for your saving purposes. Look forward to the days each week when you can stand in line at the bank and make deposits, learn to dislike the feeling of withdrawing anything out!

With your cutbacks don't be too harsh, you may last 2 weeks but not much more if your savings regime is too stringent. It's far better to save a little over a long time, consistency is the key to success with savings just the same as it can be dieting for example.

On average experts will say you should aim to save 10% of your pay. However you may find you are able to save more or less than that amount. You be the judge.