It is said that ‘habits become second nature’. Saving money is a habit that is worth cultivating.
In times of inflation, it becomes extremely necessary to save. The cost of living especially in big cities is quite high. For any family, some of the major expenses include grocery and shopping bills, children’s education, insurance premiums, house rent, loan EMIs and so on. Savings prove beneficial to meet one’s life goals, for instance, buying a property. They also come in handy when emergencies happen and lead to unwanted expenses.
The earlier one starts saving, the easier the future will be.
We list some money saving tips that would give an idea on how you can save money effectively.
Teach Kids the Value of Money
Teaching kids about the benefits of savings will ensure they grow up as responsible adults. Let them learn to save small amounts in their piggy bank. This would be their first lesson. As they reach their teens, you can even consider opening a bank account for them. By the time they reach college, they will be prepared to handle money in a better way.
Track Monthly Spending
Although you must keep a check on reckless spending, but saving money does not always mean cutting down on your expenditures. There are many smart ways to manage money more effectively. Set aside a significant portion of your earnings for savings purpose. Ensure that you do that on a regular basis.
Keeping a check on one’s monthly spending will give you a clearer picture of how much you can save.
Build an Emergency Fund
There could be some unforeseen expenses that you may have to deal with. Emergencies like an accident can result in major repair costs for your vehicle. Even medical emergencies like health problems can occur unexpectedly. All these events can have a big financial impact. Hence, setting an emergency fund is a must. Ideally, the amount one should save should be sufficient to meet the living costs for a minimum of three months.
Purchasing a health insurance policy is a logical solution to minimise emergency medical expenses.
Set Long Term Goals
Start with a monthly goal – that of saving some portion of your earnings. Pick a savings account and make regular investments. There are a host of tax-saving options available for a salaried person. Take your pick by keeping your needs in view. Have a vision for your future, especially life after retirement. It is advisable to build enough savings that will guarantee you a comfortable retirement.
Factors such as inflation and emergency expenses hint at the importance of regular savings. The habit of savings must be developed at an early stage in one’s life. This will prove beneficial in the long run. In short, you must understand that the investment you make today will assure you of a secured life tomorrow.
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