Saving money is like stocking vegetables at home for your everyday meals. You may have a garden where you can grow vegetables and take them as and when you need them. However, the garden is subject to damages due to several factors like weeds, weather, etc. You cannot skip a meal for that reason. In our text, the garden is an investment and stocking of vegetables mean savings. Thus, a savings plan will help you manage short-term goals, access funds easily, and have a lower risk considering the value loss.

Why should you save money?

Before stepping into the world of savings plan, you should understand why savings are necessary.

1. To serve as financial protection to you and your family.
2. To restrict unwanted spending.
3. To avoid taking up loans.
4. To make the best use of the opportunities in the market.
5. To get additional benefits such as interests.

5 Basic Tips for Savings

When you start saving money, you must have a disciplined approach. You must incorporate this idea from the beginning to organize your income well and serve the purpose better. Here are a few tips for choosing the best saving plan.

• Life Insurance Savings Plans: There are life insurance products that offer dual benefits of life cover and savings benefit. The investment is made in low-risk or zero-risk instruments, assuring guaranteed returns. Guaranteed Returns Plans or Guaranteed Income Plans will increase your wealth in the long run. Also, choose options with clearly defined payout tenure and frequency so you can plan your financial goals accordingly.
• Goal-oriented:Define your financial goals in the short term and long term to orient your savings better. Analyze your income, the different financial commitments you are responsible for and the time frame required to achieve it. It is also important that you calculate and have a fair idea of the quantum of money required to meet your financial requirements.
• Monthly savings:As a beginner, it might seem difficult to take a large chunk of money from your pocket and deposit it elsewhere. Focus on a monthly savings plan with a reasonable amount so that you can feel the portion of money less in your hand but not very much prominent. There are options like a guaranteed savings plan wherein you keep paying premium amounts monthly, which will provide a guaranteed amount after a specific period. You will also get a life cover and other guaranteed additions on maturity. Other guaranteed income plans will give you guaranteed income regularly. Choose the best savings scheme considering various options.
• Tax savings Schemes: If you feel that you are paying a lot of taxes from your personal income, you can always choose options that give you a tax benefit. Section 80C of the Income Tax Act, 1961 provides tax deductions for the premium paid towards life insurance savings plans. The maturity benefits and bonuses paid out through these savings plans are exempt from taxation under Section 10(10D) of the Act.
• Seek Expert Guidance: As the avenues for the savings plan are vast, it is always difficult to make the right choice as a beginner. There are various savings schemes in India offering the dual benefit of life and savings. You can always seek expert guidance to understand them better and make smart decisions.

Conclusion

These tips will help you make wise decisions on a savings plan as a beginner. You can invest money at your convenience and as per your financial goals and start your savings plan. You must stay patient and consistent throughout the period to save better!