Money saved is money earned! This adage couldn’t be truer in today’s times with rising inflation and cost of living plaguing every household. No one wants to lose their savings or hard-earned income. It is also very easy to lose or spend accumulated wealth unless you are a smart consumer who knows your money’s worth. So, what does it take to not only save your money but also grow it in a way that works for you in the future? We have listed a few ways you can use to save your hard-earned money.
Whether you are a college-going student or a young professional or even a seasoned professional or business person – we all strive for perfection and want to grow personally, financially, and professionally in life. Out of cash is one state that most of us go through despite our current living standards. The recent covid pandemic taught us that health > wealth but without sufficient health coverage, most of us exhausted our savings to save our loved ones. So, if you earn pocket money or a stable income, your money is hard-earned, and finding ways to save it will bring financial wisdom sooner which will help boost your income. Here are the simple ways using which you can save money –
1) Park your funds in a savings account
Instead of opting for a regular bank deposit, or locking your savings away for a long tenure, like in a fixed deposit, choose a high-interest savings account. Most of the banks in India don’t provide good interest rates on the savings account, but banks like IndusInd Bank provides the best interest rates on savings account which can go as high as 6%!
2) Create a monthly budget
Most of us avoid the concept of creating a budget because we assume it will make us cut corners. Well, on the contrary! Being financially fiscal is the word of the day. While it’s ok to pamper yourself occasionally but to splurge without saving a chunk of your income isn’t a sound financial decision. You may need urgent cash anytime for any reason because life is full of unforeseen circumstances. Therefore, one must always strive to strike a balance between your expenditure and income. So, track your necessary expenses and unnecessary expenditure and try to create a budget to park it away to use as emergency funds when the needs arise. The habit of savings starts from here.
3) Diversify your investment portfolio
Always aim to create and diversify your investment portfolio, which starts from the basics – savings. Once you have saved enough, you can opt for long-term investment options to grow your money, such as fixed deposits. Or when you have a stable income, you can opt to invest a part of your salary in a SIP (systematic investment plan). If you start early, you will retire a millionaire without ever breaking the bank.
4) Invest in medical insurance
If covid taught us anything it’s the importance of having medical insurance. It’s your biggest investment – to invest in your health. If you are in a position where you can afford to get your parents covered, get them the best health insurance policy, and save future money in hospital expenses. Protect your life by spending on necessary expenses. Buying health insurance will help you against rising medical costs in the future and let you and your family live your life without any stress.
5) Save money on Tax
Be a smart consumer and spender. Do good with your money. Donate to charitable causes and invest in FDs, PPFs, and EPFs. There is a huge scope for you to save tax money on your income. You need to evaluate sections like 80C, 80D, HRA, and 80E. For instance, if you are a beginner, investing your money in life insurance, medical insurance and SIP, and even donations, will save you a chunk of money in taxes – you may even get a refund every year! Speak with your company’s CA to get free guidance on this matter.
So, to sum up – start putting part of your income or pocket money away in high-interest savings account to start your financial life on a healthy note. These easy and small tactics will help you create an impeccable money savings plan for a bright future.