Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term

Protect Your family’s financial future with Kotak e-Term. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Lifetime Income Plan

Retirement years are the golden years of life. Know more


Get a Call

Enter your contact details below and we will get in touch with you at the earliest.

  • Select your Query

Thank you

Our representative will get in touch with you at the earliest.

What is the Importance of Saving Money?

By making saving a priority, you can take control of your finances and build a brighter future for yourself and your loved ones. If you are interested in exploring the different plans that can help you save money, you have landed on the right page. Read ahead and find answers to all your money saving questions.

  • Apr 26, 2023

The importance of saving money cannot be overstated, as it is a critical tool for achieving financial security and stability. Saving money may sound very easy, but do not be fooled by how simple it seems. Saving money can be tough if you do not have the right money-saving plan alongside the support of the best tips.

Key takeaways

  • A person should keep around 50% of their income for routine expenditures, 30% for lifestyle, and the remaining 20% for savings.
  • Financial advisors suggest cutting short on luxuries and saving 35-40% of your income if possible.
  • From budgeting and investing to cutting back on expenses, there are countless strategies we can use to save money and build our wealth.
  • Budgeting is the first step in saving money. Determine how much money you need to spend each month on necessities like rent, utilities, and groceries.

Many studies on wealth expenditure suggest that most people spend extravagantly with a higher income. If you closely observe this in your life, you will realize that your living standard improves as your income increases. Unfortunately, when you fail to comprehend that your ‘want’ is not your ‘need,’ you tend to prioritize luxuries, spending more than you earn. This leads to a financial situation where you neither save more nor grow your reserves.

What is the solution to get off this never-ending cobweb of financial dependency? The answer is saving money.
This article discusses aspects related to saving money. Here, we will talk about the best way to save money, the best money-saving plans, the importance of saving money, and share some good savings tips to use in daily life.

Why Should You Save Money?

You must be thinking about why saving money is necessary. And what is the importance of savings?

  • Let us consider an example and understand this. Picture yourself as the new employee who has just started earning. As a young adult fresh out of college, you must have numerous desires. The list goes on, from owning your first bike to buying costly cosmetics to getting expensive gifts for your near and dear ones from your first salary.
  • Having such a lifestyle where you focus on investing in liabilities without any savings can act as a disaster in the long run. You would also limit yourself from creating wealth to survive situations where savings might fall short.
  • This further serves as an invitation to big financial troubles in the future. Therefore, to ensure you do not land in such a situation, you must understand the importance of saving money.
  • In a world full of lures, saving money from your income requires a lot of sincerity and discipline. But, at the same time, even if you have sincerity and discipline, you will not be able to grow your savings without a decent and wise money-saving plan.

How Much Money Should You Save From Your Salary?

Honestly, this is the most critical question you should ask before moving ahead with a fool-proof money-saving plan. Your salary or income binds you to a financial limit to a certain extent. So, if you are a salaried employee or someone dependent on a monthly income, your focus should be on how much you can save money and not on how much you earn.

If experts are to be believed, ideally, a person should keep around 50% of their income for routine expenditures, 30% for lifestyle, and the remaining 20% for savings.

However, given the reality of life and goals, financial advisors suggest cutting short on luxuries and saving 35-40% of your income if possible. This will help you quickly achieve your short-term and even long-term goals.

Top Money-Saving Tips

Undeniably, you want to get the key to the best way to save money. However, if you look right into your daily life and follow some easy money-saving tips, you can save a large sum of your income.

  • Make a monthly budget plan
  • Cut expenses from your monthly budget
  • Saying ‘NO’ to credits and debt
  • Finding the best money-saving plans and investing in them wisely
  • Considering salary hikes and bonuses as savings cutting fines/penalties by timely payment of EMIs and bills.

Best Money-Saving Plans

With the cost of living constantly on the rise, it is important to find ways to save money and ensure our financial security in the long run. Luckily, there are plenty of money-saving plans available to help us achieve our financial goals. From budgeting and investing to cutting back on expenses, there are countless strategies we can use to save money and build our wealth.
Let us now explore some of the best money-saving plans that you can use to take control of your finances and secure your financial future. Whether you are just starting to save or looking to improve your current financial situation, these tips and strategies will help you make the most of your money and achieve your financial goals.

Money savings tips to reduce financial stress

Mutual Funds (SIPs)

Systematic Investment Plans, or SIPs, are one of the best ways to start your savings and investment journeys. In this, you can start investing with as low as ₹500 every month and slowly increase your contribution in the coming years. Constantly investing for 10-15 years can help you achieve good returns when you need your money.


Unit-Linked Investment Plans, or ULIPs, is another good financial product to help you create wealth in the long run. The idea is to pay a yearly premium divided into investment and insurance. Then, if you face an unfortunate incident, your family can also get the returns and death benefit—a two-in-one solution.

Guaranteed Savings Plan

Similar to ULIP, Guaranteed Savings Plan also allows you to invest a yearly premium for a specific period and give you guaranteed returns over the years. However, the difference here is:

ULIP allows you to invest in different options like equity, debt, and so on, which provides you with an opportunity to earn an optimal return.

Do not get confused; both plans are best per the requirement. A guaranteed savings plan is your saviour if you are looking for guaranteed returns to achieve a life goal. However, if you are looking for a much-balanced return with a high-risk appetite, ULIP is your friend.


PPF/EPFs are other excellent options for investing and savings. These plans also allow significant tax savings. Another benefit is that the Government runs these schemes; hence, your money is safe.

Reasons Why Saving Money is Important

Savings are essential for everyone, regardless of income, consumption, or life stage. Here are some of the reasons why you should start saving.

Gives You A Better Future

Savings can help you achieve a variety of objectives. You can use your money to buy a house, save for retirement, or buy a car. You may safeguard your future, enjoy the most that life has to offer, and live a very satisfying life. It pays for your children’s education, and with significant savings, you can fuel your children’s dreams and pay for the greatest schools and colleges around the world.

Offers Peace Of Mind

Knowing that you have a certain amount saved up for emergencies provides you peace of mind. You can live a stress-free existence knowing that you will not have to suffer if things go unexpectedly wrong.

It provides security for your family in the event of an unpleasant incident: By saving in a disciplined manner, you may ensure that your family is well provided for. In difficult times, your money might act as a cushion for your loved ones, assisting them in overcoming financial difficulties.

Plan Your Short-Term Goals

Savings are not only for the long term. You can also benefit from short-term savings. Many people save for a few months before travelling.

Tips To Enable Savings

Saving money is one of the most essential financial habits that everyone should develop. Unfortunately, not everyone finds it easy to save money. With so many expenses to deal with, saving money can sometimes feel like an impossible task. But with the right tips and tricks, anyone can start saving money and building a secure financial future. Let us now look at some amazing tips to enable savings:

Set a Budget

Budgeting is the first step in saving money. Determine how much money you need to spend each month on necessities like rent, utilities, and groceries. Make sure you understand your income and expenses completely. Once you know how much you need to spend, you can set a savings goal.

Track Your Expenses

It is essential to keep track of your expenses to identify areas where you can cut back. To keep tabs on your spending, utilize a spreadsheet or a budgeting tool. This way, you can see where your money is going and make changes to your spending habits.

Cut Back on Unnecessary Expenses

After you have tracked your expenses, identify areas where you can cut back. For example, you can save money by bringing your lunch to work instead of eating out. You can also cancel subscriptions that you do not use or need.

Start an Emergency Fund

Emergencies can happen at any time, and having an emergency fund can help you avoid financial stress. Create an emergency fund with enough money to cover costs for three to six months. This way, you will be prepared for unexpected expenses like medical bills or car repairs.

Automate Your Savings

Automating your savings is among the simplest strategies to reduce your spending. You can program transfers from your checking account to your savings account to happen automatically. This way, you will not have to remember to save money each month, and you will be less likely to spend the money you intended to save.

Find Ways to Earn Extra Money

Look for ways to earn extra money to boost your savings. You can consider taking up a part-time job or selling items you no longer need. You can also look for freelance opportunities or start a side hustle.

Avoid Debt

Debt can be a significant obstacle to saving money. Avoid taking on unnecessary debt, and make sure you pay off any outstanding debts as soon as possible. This way, you can free up money to save.

Wrapping Up

The importance of saving money cannot be overstated. Whether it is for a rainy day fund, retirement, or to achieve your financial goals, saving money is a critical part of achieving financial stability and success. By making saving a habit and finding ways to cut expenses, you can build a strong financial foundation that can help you weather any financial storms that come your way.

Remember, saving money is not just about accumulating wealth; it is also about giving yourself peace of mind and the ability to live the life you want without financial stress holding you back. So start saving today, and watch as your financial future becomes brighter and more secure.

In this policy, the investment risk in the investment portfolio is borne by the policyholder.

Kotak e-Invest

Download Brochure


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


- A Consumer Education Initiative series by Kotak Life

Similar Articles

What are the Best Short-Term Investment Plans with High Returns?

Investment Options for NRIs in India

Different Types of Endowment Plans

Why ULIP is Better Investment for Long-Term Wealth Creation?

Which are the Best ULIP Plans in India for Children?

Learn About Safe Investments with High Returns in India

How to Plan your Investment to Achieve Periodic Financial Goals?

Best Investment Options in India in 2022

How to Manage Your Portfolio Like a Professional?

The Importance of Starting Early: Securing Your Child's Future with a Child Education Plan

Unit-Linked Life Insurance (ULIPs) vs. Term Insurance

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

How to Use Recurring Investment Strategies to Build Wealth?

What is a Child Money Back Plan, and How Does it Work?

What is Fund Switch in ULIP? And ULIP Fund Switching Techniques

Top 10 Investment Strategies to Create Wealth

A Step-by-Step Guide: How To Make An Investment Plan?

How to Manage Inheritance Money?

How to Calculate Your ULIP Returns?

What is Money Management? Definition & Example

What is a Savings Plan and What are is Benefits?

Important Questions You Must Ask Yourself When Buying a ULIP Plan

ULIP vs FD - Which is Better and Why?

The lesser-known facts about ULIP policy that customers should be aware of?

What is Compound Interest, And How Do I Calculate it?

ULIP Investment Strategy: Top Tips to Improve Your ULIP Gains

What is ULIP Renewal?

Rate of Interest on Different Investment Plans in India

Safe Investment Options with High Returns for FY 2018-19

How to Increase Net Worth Along with Family Protection

वित्तीय संपत्तियां और उनके प्रकार

Is This The Right Time To Invest In ULIP? Why or Why Not?

Top 5 Principles That Need to be Followed for Wealth Creation

What are the Best Investment Options For Females?

Endowment Plan vs Fixed Deposit?

Got a Salary Hike? Here’s How to Plan your investment further

What is ULIP and Its Benefits?

How To Invest Money In ULIP?

Planning Financial Goals and Objectives of Financial Planning

Best One-Time Investment Plans in India

What is NAV in ULIP, and How is it calculated?

Everything You Must Know About ULIP Riders

Why Should You Consider Guaranteed Savings Plan for Long-Term Investment?

What are the Best Investment Options for Beginners or Amateur Investors in India?

What are Mutual Funds?

How to Plan Savings from Salary?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

Debt ULIPs vs. Debt Mutual Funds: What's the Difference?

Creating a second source of income with life insurance

What is SIP Calculator, And How Does it Work?

What are Financial Assets & their types?

Factors Affecting Stock Markets

How Can a Legal Nominee Claim ULIP Benefits are the Policyholder’s Death?

Can ULIP Help in Achieving Short-Term Financial Goals?

What are the Best Investment Options for Students in India?

Top 5 Investment Options in 2022 for Healthy Returns

Which are the Best Investment Plans for Indian Senior Citizens in 2022?

Best Investment Options to Cover Your Child's Education

Are Money Back Policies Helpful? A Complete Guide

What is the Time Value of Money (TVM)?

Here's Why it's a Good Time to Explore ULIPs as an Investment

Why are ULIPs One of the Best Tax Saving Instruments?

Difference Between Passive and Active Investing

ULIP as an Investment for Your Child

ULIP NAV Meaning & How is the Return Calculated in ULIP

Difference Between Guaranteed Savings Plan and ULIP

Planning for Your Child's Higher Education? Explore These Investment Options

What is Equity Mutual Funds: Meaning, Types & Benefits

Savings Plan for Grandchildren

Receiving regular payouts at various stages of life

Why Do You Need A ULIP Plan - All You Need To Know

यूलिप के फायदे (Benefits of ULIP in Hindi)

How is the Compound Annual Growth Rate (CAGR) Calculated in ULIP?

Best Guaranteed Returns Investment Options to Meet your Financial Goals

Are Investment Returns Guaranteed in a ULIP?

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

What are the Advantages and Disadvantages of ULIP?

Why Should Parents Invest in Endowment Plan?

How to Plan Your Child's Education - A Step-by-Step Guide

Do You Know the Difference Between Savings and Investment?

Investments Options to Buy a house in India

What are Index Funds and How Do They Work

Long Term Savings Plan - Best Savings Investment Plans in India

यूलिप के फायदे और नुकसान क्या हैं?

How to Make Your Financial Portfolio?

Importance of Portfolio Management

Is the ULIP Policy Surrender Value Taxable?

Why Should You Invest in Term Insurance And ULIP?

Customising investments to manage your wealth

What is Direct Investment and its Types?

Beginner's Guide to Wealth Creation: Meaning, Strategies, & Importance

Things to Know Before Buying an Endowment Plan

Four Financial Lessons from The Vedas on Living Life to The Fullest

Are Gains from ULIP Sale Taxable?

What is ULIP Plan, and How Does it Work?

ULIP Benefits You Can Avail from Early Investing

How Can ELSS Funds Help You Save Tax & Create Wealth?

How to Start Saving Money in 10 Simple Ways?

Benefits of ULIP as a Child Insurance Plan

8 Charges in ULIP That You Must Know

Which is Better – FD, Mutual Fund, SIP, or ULIP?

Why Should I Invest in ULIP?

4 Benefits of ULIP Fund-Switching Feature

How To Track ULIP Performance?

How Do One-Time Investment Plans Work?

What are Some of the Safest Investment Options in India?

What is a Credit Score and How Can Insurance Help You Improve it?

Learn About Safe Investments with High Returns in India

Asset Allocations in ULIP - Know the Top Benefits

How Does an Endowment Plan Work?

What's Better for Your Child's Education? Child Plans or Mutual Funds?

How Much Wealth Can You Create from ULIP in 10 years?

Why Should You Build an Emergency Fund?

ULIPs Investment – A Boon or Bane?

8 Important Tips to Maximize Gains with ULIP Investments

ULIP Plan as a Gift

Can ULIP Policy be Transferred?

How to Fulfil Your Financial Goals in the Next 10 Years?

ULIPs: Suitable for all

Corporate Bonds: Meaning, Types & Benefits

Successful Financial Planning for Urban Women

उच्च रिटर्न प्राप्त करने के लिए सर्वश्रेष्ठ इन्वेस्टमेंट विकल्प

Building wealth through regular investing

Why Are ULIPs Called Flexible Investments?

Top 10 Investment Plans Available in India

ULIP Capital Gain Tax: Check Tax Norms for Capital Gain on ULIPs

Difference Between ULIP and Endowment Plan?

What are the Best Investment Options for Young Adults?

6 Important Tips to Maximize Your Gains with ULIP Investments

Does Rupee Cost Averaging Work In Unit-Linked Insurance Plans?

What Is Financial Planning?

लॉयल्टी एडिशन क्या हैं, और वह यूलिप में कैसे काम करते हैं?

What are Tax-Deferred Savings Plans?

Which is a Better Investment - Mutual Funds Or ULIP?

यूलिप प्लान में परिपक्वता लाभ क्या हैं: फंड वैल्यू सम एश्योर्ड या ओनली फंड वैल्यू?

Short Term and Long Term ULIP Plans for Wealth Creation

What are loyalty additions, and how do they work in a ULIP?

How to Choose the Best ULIP Plans to Invest in 2022?

How to Cancel ULIP Policy?

Best Investment Plans for Children - Secure Your Child's Future

Early Investing and the Power of Compounding

How To Diversify Portfolio In 2023?

Why is Portfolio Diversification Important? How to Diversify Your Portfolio?