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The earning class in India falls into a wide range of salary brackets, with a significant number of salaried individuals earning a considerably low income. However, it is important to save money irrespective of whatever you earn to ensure that you create a reliable amount of wealth. The burning question for most salaried individuals working in the low salary bracket is how to save money with low income in India, given the high inflation rate in the country?
The straightforward answer to this concern is changing your spending habits, budgeting for a low income, and strictly following saving strategies for low income.
Many experts believe that you should not underestimate the power of starting early. Start early, start small and slowly develop a habit to save.
This article will discuss how to budget and save money on a low income, how to save money with low income in India, budgeting on a low income, and the top tips on budgeting for low income, among other money saving tips for low income earners.
However, before we move forward to discuss saving strategies for low income, let’s look at how to divide your monthly income/salary for a better savings insight.
Many experts suggest that around 40% to 50% of your monthly salary must be invested in household/living expenses, around 20% to 30% in food and necessary lifestyle. And a minimum of 20% to 30% must be summed up towards savings.
However, since you are earning a low income, you must target to save most of it and push the savings limit to above 35% of your monthly salary. Through this, you will quickly achieve your short-term and long-term savings goals and help you in accelerated wealth creation.
No expert can help you budget until you don’t research and analyze your expenditure. Budgeting may sound very technical to many, but it is simple math that involves the basic allocation of your monetary priorities. The rule is to create a budget that suits your financial goals.
A budget is important because unplanned expenditure can easily exhaust your money and impact your saving strategies for low income. Therefore, your focus on budgeting should be on allocating money for maximum savings instead of how much you earn.
A budget will certainly help you in gaining clarity over your expenses. However, a more effective tool when controlling unnecessary expenditure is a “cash-envelope” system for yourself. As per this system, you have to keep pre-allocated cash for every week’s expenses and manage accordingly. This will help you in limiting your weekly expenses.
Remember, the goal still is saving, so you can try to cut expenses here and save some money for next week.
It is highly recommended to do shopping on paper before spending money on stuff in real life. This is the best way to save money with a low income. In addition, this helps you in fixing unnecessary leaks.
Making a list of the items you need and putting an estimated price for all of them helps you decide your priorities and keeps you in check while shopping from temptations.
Financial tools help you in being bound to invest money. This helps in building a good habit when trying to save money. You can look for a short or long-term savings plan and invest money into it. This will help you save and gradually help in wealth creation and support you in a financial emergency
Here are some of the most loved investment plans:
The toughest part about savings and wealth creation is crossing the starting point. But, once you get a taste of wealth-creation, you will never look back and will gradually understand all about how to save money with low income in India and the best way to save money with low income.
So, if you are among those earning a low income, then your best bet is having disciplined financial expenditures, researched and analyzed budgeting, predefined saving strategies that suits your requirements, and the correct choice of investment plans to serve your financial goals.
In this policy, the investment risk in the investment portfolio is borne by the policyholder.