Saving money is a good habit. It is your habit of disciplined saving that can help you fulfill various financial goals in your life. Life is uncertain and so the need for money can arise at any point of time. It is crucial to save money from whatever income you make in a month and ensure it is protected. Money is precious to every individual and a key essential in the real time of need.
Introduction to Saving
The money you save or keep for uncertainties proves useful in emergencies that includes medical emergencies and more. The COVID-19 pandemic that is still prevailing has taught us many vital lessons. One of the highly considerable reasons is that it is your saving that help you stay strong and manage living in time of pandemic. People habitual of regular saving were not required to struggle for money during pandemic. Financial planners believe one should have a saving sufficient enough to manage atleast the monthly expense of 6 months in the condition you lose your job or face financial crisis.
After you understand the importance of saving and convinced with the vital role it plays in your life in time of uncertainties, you can commence to keep away some part of your earning every month.
The following simple steps will help you save money:
1. Make your monthly budget
Everyone has his/her fixed monthly expenses. Some are mandatory and a few others may be unavoidable. No matter what amount you earn in a month, making a budget can help a lot. The need is to stick to the budget and manage spending within the available amount kept aside for the spendings.
2. Disciplined Habit
Saving for a few months will not solve your purpose of creating wealth for your future. You need to develop a disciplined habit of saving and follow it honestly. It will help you save money for your varied financial needs arising at various intervals.
3. Involve your spouse in earning
Supporting your partner with the possible income is a good idea. It will help you keep yourself engaged and generate some income for your family. The cost of living is increasing at a fast pace and so there is a need for additional source of income. You can thus work with your partner and together contribute to saving regularly to meet the different liabilities in future.
4. Buy Life Insurance Plans
Buying insurance plans is a very good option to develop a habit of regular saving. It helps you avail dual benefit that include risk cover and a fixed return at the end date of maturity. Buying life insurance today is made hassle-free for you. It is one of the best and simple way to save your money. Your money in LIC is also protected with sovereign guarantee by the government of India.
5. Understand the value of cash flow
The understanding of cash flow help you learn how it works. You will be able to review and monitor your household expenses. This will help you further plan your incoming and outgoing to ensure the availability of money for disciplined saving.
6. Do a regular review of spending
Many times, we do not realize what we spend and where we have spent. It may disturb the monthly budget. Doing a review of your spending will help you have a control on your unnecessary spendings. It will also help you review all your transactions and payments.
7. Consider your children
Children are important part of every family. Teach them to save, make them understand the importance of saving, and spend wisely. Children generally are into bad habit of doing unnecessary spendings, buy things not of much use, and waste money without a valid reason. You can set an example for your children by commence saving yourself first. You can tell them to start saving money in a piggy bank, a pouch, or in a child saving account to purchase a cycle, study table, and such other useful things in future. Children can also contribute to saving by avoiding unwanted expenses and do purchase on discounts.
8. Understand the difference between ‘Want’ and ‘Need’
It is necessary to understand the difference between the two terms ‘Want’ and ‘Need’. Everyone in the family need to understand it to be able to say no to things which are not of real need. It will help manage your budget effectively and financials without any kind of problem.
9. Automate some monthly savings
People miss the monthly saving by their habit of waiting until month end to keep the amount meant for saving. It is the problem prevailing in every second family. So, the best solution for such problem is to automate the payments made towards your saving like the money for SIP, LIC, and other investment products. For the Electronic Clearance Service (ECS), you can give your bank the necessary instructions. In this way, you will not miss to save the amount and accumulate a good amount of money over the time. Do not delay it anymore if you have not yet availed the facility of ECS, go for it today.
10. Begin now
Never postpone your financial goals. there will be one or more expenses or problem coming in your way until your last breath. It will delay your idea of saving and become a cause of unwanted problem in future. So, keep everything aside and start now your saving journey to secure your future.
Ways to Protect Your Money
There are a few ways that you can consider if you wish to protect your hard-earned money. There are many investment instruments and sources that assure your return on your money but do not guarantee your capital.
Let us discuss about a few option that are known to safeguard your capital to some extent.
1. Saving account in a bank
Keeping your money in a saving account do not help you earn good return on your surplus money. You can be considered better than keeping it under a mattress at your home. Banks under the new instructions guarantee the security of your money in the saving account up to a limit of Rs. 5 lakhs incase of default through the medium if insurance which earlier was only 1 lakh rupee. You can take your decision to keep your money in a saving account considering the above discussed conditions.
2. Insurance products
Insurance products can be a good option for many who want to secure money in the form of sum assured and bonus payable on the paid premium until maturity. Life insurance product particularly Endowment policies assure you a fixed return that you get as Sum Assured. Some companies like Life Insurance Corporation of India guarantees investment done in single premium policies and endowment polices (guarantee of capital in case of default through Sovereign Guarantee where government of India takes risk of repayment to the investors).
3. Buy government bonds
Government securities are known to be more secure. Investing in government bonds can help secure your capital to a certain extent. So, buying government bonds can be a good option for risk-averse individuals.
For the safety reasons, make sure:
- You do not click on links or attachment coming to you from unknown sources
- Check your bank accounts everyday
- Use strong passwords and at least two step security
- Change your password at regular intervals
- Never share your bank details, OTP, and important credentials with anyone
- Check your credit card account atleast once in a month
- Stay careful while making any financial transaction
5. Stay away from Debt trap
Debt is one of the biggest problems that can result in stress and loss of money paid as interest on money borrowed from different sources. Incase you are in debt try to prioritize your bills, outstanding payments, and follow a successful debt payment plan. It will help you come out of debt trap and secure your saving for a better future.
5. Avail expert advice
There are financial consultants and experts in the market who are engaged in guiding people secure their hard-earned money. They transfer the necessary knowledge and help their clients enjoy peace of mind. If you are struggling with personal or professional finances, hire the service of a financial advisor who will guid you to make investments in a way that shield your investments and surplus money.
Protecting your money is also important. Saving is a good thing and a necessity of life. Your habit of saving can help you enjoy financial freedom and live debt-free life. We hope the steps shared above to save and protect your money proves useful for you. The views and tips discussed are a personal opinion, but it might help you achieve your financial goals and fulfil your certain liabilities in life.