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Contact us
To Buy: 1800-258-5899 (9:30 AM to 6:30 PM)
For Existing Policy: 1800-103-0003/ 1800-180-0003/ 1800-891-0003
customerservice@canarahsbclife.in
If you are wondering 'How much money should you save every month?', and the answer depends on your financial goals. Remember that it is never too late to start. It is only too late if you don’t start at all.
We save money for serving multiple purposes. For example, we save - to buy a car, for a home, go on vacations, sponsoring child's higher education, or for retirement days. So, saving money to secure your family’s future is an integral part of your financial planning.
For some of us, it may become a challenge to make way for savings every month as our expenses are more than what we earn. But saving helps you manage money efficiently.
The amount you need to save every month depends on your saving goals. We generally save with a goal in our mind. These are categorized into short, medium, and long-term. And for each category, you have to consider different timelines.
✓Less than a Year - For all the 1-year goals, you can rely on short-term savings. These goals may include an exotic vacation or paying for a small ticket item like a new smartphone or gadget.
✓Less than a Decade - For all the goals that need a good amount of money and time, you have to consider investing money in medium-term investment plans. Goals such as buying expensive equipment or device, getting a new car, or redoing the interiors of your home would require some time and a dedicated corpus.
✓Lifetime - The major lifetime goals are building a retirement corpus, buying your dream home, or financing your kids’ higher education.
Personal and financial goals tend to change with age, but it’s never too late or early to save money.
Your savings target will depend on your age, monthly income, outgoings, liabilities and debts, life insurance premium payments, etc. Consider such factors to build your financial profile and then set a target by keeping in mind your monthly budget.
Saving money each month is beneficial in the long run as you will have finances to deal with any crisis. Apart from providing financial cushion, saving money has the following benefits:
ESI covers the following benefits:
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It is evident that saving provides financial security, and having money makes life easier. Any money saved or invested somewhere with returns helps to build a financially worry-free life. Most people save money for retirement as the regular stream of income stops.
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There are many ways to save money for the future; one of the most common is to invest it. Investing money means making more money out of money. This kind of wealth creation comes with some risks. There are various investment options, and you should choose options as per your risk appetite.
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Saving provides financial freedom. One should not be financially dependent on someone else. It is essential to have funds for emergencies and unexpected expenses. Savings allow you to achieve your financial goals.
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Emergencies are unpredictable, and having an emergency fund can save the day. An emergency fund is cash set aside in a savings account only for unexpected situations such as accidents, critical illness, etc. To keep emergency savings accessible and available, consider having an online savings account. If you are worried about managing the healthcare costs in case of a critical illness, you may consider buying a term insurance plan.
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One should aim to save 15% of the salary for retirement or start with a percentage that is under budget and manageable. Gradually increase it by 1% each year to reach the desired figure. The ideal way to save for retirement is by automating monthly transfers from the checking account directly to the savings account.
Saving money for the future is considered one of the most important aspects of life. You must have a proper understanding of the different types of investment options available. Saving is a wealth collection method, while investment is a iSelect Smart360 Term Plan method. Working on both will help you to secure your future.
Now that you understand the importance of saving money each month, you should also know a few ways to save. There is no “one size fits all” formula in personal finance.
Listed below are some of the popular ways to save:
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It states that 50% of monthly income should be spent on essentials like food, rent, medical bills, education fees, etc. While 30% should be used for discretionary spending, and 20% should go towards a saving pot. However, it is not always easy for everyone to set aside 20% of what they earn for savings. In that case, save as much as possible.
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It is an excellent way to keep track of your money. While setting up the monthly budget, you must have allotted a specific amount to each category. Write down those categories on different envelopes. Put the assigned amount under each category inside the envelope. If you go overboard, you will get to know that you have spent more than what you had planned for spending. And at the end of the month, whatever amount is tucked away in all the envelopes, you can put it in your savings account.
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You can use saving and investment plans to put your money. Savings plan like iSelect Guaranteed Future offers a life cover with guaranteed maturity benefits. These are beneficial to meet long-term financial goals as the corpus can help you attain milestones that you had set in life, for example, your child’s higher education, their marriage, etc.
Saving is an integral part of financial planning. The earlier you start saving, the better it is. You will get more time to save and boost your wealth in the future. However, choose a savings plan that aligns with your life goals.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised to exercise their caution and not to rely on the contents of the article as conclusive in nature. Readers should research further or consult an expert in this regard.
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