The hardest thing about saving money is usually getting started with it in the first place. Often, people end up pushing their savings plan to accommodate their existing expenses or upcoming dues.
However, this is a very rocky path as your finances will soon be all over the place, and it only gets difficult from this point onwards. If you want to align your finances as soon as possible and find the best saving plan to get started, it would be in your best interest to create a saving strategy.
Here is a step-by-step guide for how to save money by strategizing and developing a simple plan, which can help you can help you save for all your short- and long-term savings goals-
1. Keep A Separate Budget For Your Savings
Most people end up utilising their savings or income for their expenses and spend money as and when needed. Later, they think of saving if they are left with some by the end of the month. It is wiser to first start by keeping money aside every month, from your earnings, and then breaking down the rest of your earnings towards expenses and other dues.
2. Maintain Records Of Your Monthly Expenses
Before you start creating your saving plan or look up the best savings plan in India, figure out how many expenses you have every month. Some expenses like rent, bills, recharge etc., recur on a monthly basis, while some are ad hoc in nature, and you can leave an approximate amount aside for the same.
3. Set Saving Goals And Fix Priorities
Short-term goals: These are usually goals that you wish to achieve in 1 to 3 years from the time you start your savings. Emergency funds for any unforeseen scenarios, upcoming trip or travel expenses, down payment for your vehicle and such, are all examples of short-term goals.
Long-term goals: These are usually goals that you wish to achieve in the long run. Some of the most known long-term goals include saving for your children’s education, putting money aside for children’s marriage, creating your retirement fund, saving for a remodeling project or to pay down payment for a new house, to name a few. Based on the type of goal, you can then select the best savings plan in India to start your investment.
4. Choose Wisely From All Available Types Of Investments
If you are new at this, then it is best to consult a portfolio manager to help you choose the best saving plans and diversify your portfolio. From savings account to mutual fund investments and from buying gold to investing in stocks and commodities, and post office schemes, there is a lot you can choose from.
There are many types of investments, including government-based schemes, which are comparatively less risky for your investment. Moreover, there is no restriction on the number of tools you can pick as your best saving plans. Hence, based on your risk appetite, you can make a mixed portfolio with instruments that are less risky, a little risky or have high risks and high return opportunities as well.
5. Automate Your Savings Plan
Once you have decided on the types of investments you wish to make, it becomes easier to activate a monthly debit from your savings account. This way, you do not have to keep doing it manually every month, and your habit of saving regularly will also form before you even realise it.
6. Track Your Savings And Watch Them Grow
While it is not advisable to keep checking in on your investments, you must also remember to keep track of them every once in a while. Moreover, if you get a bonus or are left with extra cash towards the end of the month, then you can always invest that additional amount towards your goals.
Additionally, you can also start saving separately for your yearly taxes, i.e., save in tax saving plans like ELSS funds, ULIPs, or even buy insurance policies that can help you with tax deductions.
Under sections 80C and 80D of the Income Tax Act of 1961, you are allowed deductions of up Rs. 1,50,000 as per the old tax regime. If you have planned your tax savings ahead of time and invest in the best saving plan, then you will not have to give up hefty sums when you file your yearly tax returns.
It is always good to inculcate a savings habit, and the sooner you inculcate it better it is for you and your family in the long run. So, do you research and opt for the best saving plan, suiting your personal preferences!
