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Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
Prioritizing a savings plan is crucial for financial stability, offering a roadmap to achieve immediate aspirations, tackle unforeseen expenses, and create a resilient foundation for a secure and prosperous future.
In a country like India, where financial stability is as crucial as financial growth, creating a robust personal savings plan is indispensable. Whether you are just starting your career or are well into it, having a structured approach to savings can pave the way for a secure and comfortable future.
Saving money is a rudimentary factor in keeping up with your current and future goals. It can help you build ample resources for your future medical emergencies, vacation plans, and educational requirements and put aside a fair share of money to pay a down payment for a home or a car. Creating a well-developed and researched savings plan can help you save a share of your income and reach your financial goals sooner.
An excellent personal savings plan is a blueprint for our financial goals. It needs to be created with a realistic and practical budget to help you develop a consistent and steady savings plan. Economizing deposits into money-saving plans and long-term savings plans will help you avoid overspending. Keep reviewing your savings plan regularly to measure your advancement and decide whether any adjustments are required.
A savings investment plan is a strategy for gathering money to attain specific financial goals. Each individual has specific financial goals, and strategies are different for each to meet their end goal steadily.
Such goals may include
Different income backgrounds and different goals require different strategies and a personalized step-by-step guide for long-term savings plans investment.
Below are the steps to make the process easier:
The first and foremost step is to determine where you stand and understand the initial point for shaping a savings investment plan. For that, you need to create an inventory of financial aids that includes liquid assets and liabilities.
The assets depository comprises your cash, savings, money market and checking account, Certificate of deposit, retirement plans. It also includes your brokerage and health savings accounts, which can quickly convert to cash. You can also use less liquid assets such as your residential apartment or automobile. When excluded from your total assets, liabilities give you your net worth. Some examples of liabilities are education loans, car loans, mortgages, personal bills, Medical expenses, etc.
The foundation of any effective savings plan is a set of well-defined financial goals. Start by identifying short-term, medium-term, and long-term objectives. Short-term goals could include creating an emergency fund or saving for a vacation, while medium and long-term goals may involve buying a home, funding your children’s education, or planning for retirement. Having specific goals will give your savings plan direction and purpose.
Your goals need to be feasible and realistic and should revolve around a S.M.A.R.T. strategy that is Specific, Measurable, Achievable, Realistic and Time-bound.
Creating a budget is a fundamental step towards effective financial management. List down your monthly income and expenses, categorizing them into essential and non-essential. It would be best if you determined the importance of each goal, decided which is a priority, and allocated your savings and resources to it with a well-thought approach. This will help you understand where your money is going and where you can cut back. Remember to allocate a portion of your income towards savings right at the beginning of the month. Budgeting apps can assist you in tracking your expenses and managing your budget effectively.
When you have clarity with your goals, the next step is to consider your investment strategies and know which money-savings plan will give you the maximum benefits. Focus on maximizing your savings plan and utilizing it to its full potential. Your long-term savings plan includes some of the below-mentioned options:
Life is unpredictable, and having a financial safety net is crucial. Allocate a portion of your savings towards building an emergency fund. This fund should cover at least three to six months’ worth of living expenses. Having such a cushion can protect you from unexpected expenses like medical emergencies or sudden job loss.
In India, there are several tax-saving instruments under Section 80C of the Income Tax Act that can help you save money while also growing your wealth. Investments in Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity-Linked Savings Scheme (ELSS), and National Savings Certificate (NSC) are eligible for tax deductions. Understand these instruments and choose the ones that align with your financial goals.
Making your money work for you is a key aspect of wealth creation. Explore different investment options based on your risk tolerance and financial goals.Mutual funds, fixed deposits, and recurring deposits are popular choices for conservative investors, while those with a higher risk appetite may consider investing in the stock market. Keep in mind that diversification is crucial to managing risk effectively.
In the hustle and bustle of daily life, it’s easy to forget to save. To overcome this, set up an automatic transfer of a fixed amount to your savings account as soon as you receive your salary. This ensures that you consistently contribute to your savings without having to think about it. Many banks offer automated transfer facilities, making it a hassle-free process.
If your employer offers benefits such as a Provident Fund (PF) or Employee Stock Ownership Plan (ESOP), make sure to take full advantage of them. These contributions can significantly boost your savings without affecting your take-home salary. Additionally, some employers match your contribution to the PF, doubling the impact of your savings.
Financial situations and goals evolve over time. Regularly review your savings plan and make adjustments as needed. If your income increases, consider increasing your savings contributions. If you achieve a financial goal, reallocate those funds towards another objective. Being flexible and adaptive is essential for the long-term success of your savings plan.
The financial landscape is constantly changing, and staying informed is crucial. Take the time to educate yourself about different investment options, tax regulations, and personal finance strategies. Attend financial literacy workshops, read books, and follow reputable financial experts to enhance your knowledge. The more informed you are, the better decisions you can make regarding your savings and investments.
Ultimately, the success of your personal savings plan hinges on your ability to cultivate financial discipline. Avoid impulsive spending, stick to your budget, and stay committed to your savings goals. Developing disciplined financial habits is a gradual process, but it is the cornerstone of long-term financial well-being.
Personal savings plan comes with some of the below-mentioned vital features
Creating a personal savings plan in India is not just a financial necessity but a strategic move towards securing your future. By setting clear goals, budgeting wisely, exploring tax-saving instruments, investing smartly, and practicing financial discipline, you can pave the way for a financially secure and comfortable life. Remember, it’s never too early or too late to start saving – the key is to start today.
Amit Raje is an experienced marketer who has worked in various Fintechs and leading Financial companies in India. With focused experience in Digital, Amit has pioneered multiple digital commerce in India. Now, close to two decades later, he is the vice president and head of the D2C business department. He masters the skill of strategic management, also being certified in it from IIMA. He has challenged his challenges and contributed his efforts in this journey of digital transformation.
Prasad Pimple has a decade-long experience in the Life insurance sector and as EVP, Kotak Life heads Digital Business. He is responsible for developing user friendly product journeys, creating consumer awareness and helping consumers in identifying need for life insurance solutions. He has 20+ years of experience in creating and building business verticals across Insurance, Telecom and Banking sectors
Pay 10,000/month for 10 years, Get 1,65,805/Year* for next 15 years.
ARN. No. KLI/23-24/E-BB/1201
Features
Ref. No. KLI/22-23/E-BB/999
The information herein is meant only for general reading purposes and the views being expressed only constitute opinions and therefore cannot be considered as guidelines, recommendations or as a professional guide for the readers. The content has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Recipients of this information are advised to rely on their own analysis, interpretations & investigations. Readers are also advised to seek independent professional advice in order to arrive at an informed investment decision. Further customer is the advised to go through the sales brochure before conducting any sale. Above illustrations are only for understanding, it is not directly or indirectly related to the performance of any product or plans of Kotak Life.
