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Ref. No. KLI/22-23/E-BB/492
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.
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.
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.
You must be thinking about why saving money is necessary. And what is the importance of savings?
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.
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.
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.
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.
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.
Savings are essential for everyone, regardless of income, consumption, or life stage. Here are some of the reasons why you should start saving.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.
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.
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
In this policy, the investment risk in the investment portfolio is borne by the policyholder.
Kotak e-Invest
Features
Ref. No. KLI/22-23/E-BB/521
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.
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