How to develop a savings habit for better financial future?
Saving money with little resources nowadays is a real hardship especially when your job or business is the only source of income for you. But you have to manage to build enough corpus over the years that your ship can sail efficiently through the tough days in the sea of life. Just like you run, sleep or exercise working towards your best saving plans should also become your day-to-day habit.
A best saving plans can cater various needs such as savings for your retiring days, foreign trip, your car upgrade, child’s educational needs or marriage and more. For every petty think in life, you will require sufficient amount of money beforehand. When it comes to your family’s financial security you will bound to take any form of risk and give them the best possible life standards they deserve in future. Savings also seems to be tough when you have to compromise on your lifestyle activities such as going to movies or night clubs with friends, buy expensive gadgets or luxurious products etc.
Saving insurance plans offer by insurance companies are dual benefits plans that will offer an insurance cover for your family as well as give you an opportunity to earn from market-based funds. It requires that the investors put a section of his or her income for saving, for a set period of time. This is done via various installments – monthly, quarterly or yearly.
Here are few helpful tips which can help you build a good saving plan over the time:
Financial Picture
Before deciding your future goals, take a look at your overall financial picture like your income source, risk appetite, family needs, inflation, etc. Understand your credit, savings & debt picture to make sure you’re clear on your current commitments. Also, try to maintain a good credit score history. Once you know where you stand you’re in a better position to design a good best saving plans with coveted strategies.
Financial Targets
List down your financial goals whether its vacation, upgrading the car, child’s education, renovating the house, etc. It could be some of your agenda in near future. So, jot them down and set a specific time to achieve it.
Time the funds
Since a portion of your premium goes to market-linked funds it's important you time the funds well to achieve better returns to meet your financial goals. You can sit with your financial expert and decide the type of funds you wish to choose, the fund allocation and the investment time.
Monitor Funds
Keep a tab on your growing every quarterly. It will help you to stick to your personal best saving plans, identify and fix problems as quickly as possible. Besides, seeing your money grow generally boosts your confidence and you tend to approach your saving plan more aggressively and hit your goals faster. When you have set up your long-term best saving plans, you'll be building up a good reliable cushion that can add up to future financial security.
Divide Targets
Do a thorough calculation and divide the money you wish to save for each goal by the number of months. For long-term plans like retirement or your child marriage use insurance premium calculators that will give you an exact idea of the premium to be set and returns to be expected. To meet short-term goals work upon monthly savings principle.
While making calculations for best saving plans, don't forget that many experts recommend having enough cash on hand to cover at least six months' worth of expenses in case of crisis such as emergency, job loss or recession. Automate your monthly premium installment payments because it will streamline your expenses. You can even set up multiple savings accounts for specific goals.
