5 Saving Tips for Beginners to Start Saving Now

25-August-2021 |

Saving is a necessary habit for every individual looking to lead a comfortable life. It is said that the concept of savings emerged from the idea of abundance. Economists state that the savings habit, which usually varies between individuals, is majorly affected by social behaviour. It means the kind of lifestyle and surroundings that one lives in strongly affect the individual's social wants and determination. 

We all have specific wants like buying a dream house, car, property, pursue higher education, etc. So, if you are a beginner who is at the starting curve of saving and are eagerly waiting to start your journey to a secured future that allows you to achieve your dreams, read on.

 

Saving tips for beginners

 

  • Save first and spend later: Let us take an example of two people – both getting ₹50,000 as salary every month. Person A has the habit of saving first and spending later. He chalks out the savings and investment plan, saves the appropriate amount there and then plans his expense around the remaining amount. Person B follows the habit of spending first and saving later. But in this case, he does not have any money left at the end of the month to save.

    The result - after a period of almost 10 years, Person A saves up more than double of what Person B manages to save. He could achieve that only because of prioritising savings and streamlining expenses around it. And this brings us to our next tip – curbing expenditure.

  • Curb expenditure: This is the most important tip that can make or break your chances of achieving your dreams. When we say curb, it certainly means curb in every possible way. Do not mistake curbing to leading a miserly life. It’s more of smart work rather than hard work. Accept it; we all know our guilty expenditures - the ones we know are unnecessary yet give in to impulsiveness to spend on those. Ways like making a monthly budget, a predetermined shopping list, and allocating funds for specific spending could help you in curbing expenditure. Always remember that the key to saving is not saving after you spend but to spend after setting aside savings. 

  • Clear any debts and avoid taking on new ones: Having a debt on which you pay interest, like personal loans or any other debt, hinders the whole idea of saving as it regularly tosses away your motivation and zeal. Clearing debts first could help you have a more precise plan on how much you could save and plan your expenditure accordingly. Refrain from using credit cards to make purchases, as it is one of the easiest traps you can fall into while trying to save money. 

  • Estimate your insurance needs and build a small emergency fund: Uncertainties and surprise expenditures are not new to anyone. Firstly, address your insurance requirements, be it health insurance, life insurance, or any automobile insurance you need to address. This would further prevent you from falling short of any exigency-related expenditure. Choose the plans wisely to ensure that the insurance provider takes care of whatever is needed to be done by giving more comprehensive coverage.

    Build a small emergency fund that could address your requirements for at least six months in case of job loss or any health-related complications that could keep you away from work. This way, you can make sure that you do not fall onto your savings in the event of an emergency. Always keep emergency funds and savings separate because savings are for a far greater purpose than to meet emergency requirements.

  • Set specific goals on your dream expenditures: Set short-term and long-term goals of your dream expenditures like buying a house, car or pursuing your passions. These goals need to be specific to detail out as to what, when, which - for example, if you have a dream car that you always wanted to buy - write down the details of the vehicle make, model, specifications, and on-road price that you would need to pay for purchasing the same. This way, you stay more determined and focused on achieving your set goals. Always celebrate the small successes that you achieve in your path.

  • Have an investment plan that has guaranteed1 savings schemes: Guaranteed1 savings schemes enable you to have a steady income along with the additional benefit of covering you for life insurance. These saving schemes also act as the best tax* savings instruments as the investments made under these plans are eligible for tax* deductions.

    Guaranteed1 savings plans give a pre-set and prefixed amount of income in the form of pay-out after the premium paying term. These savings plans also give you the flexibility of paying premiums monthly, quarterly, semi-annually, and annually. Hence, you need not worry about paying an amount for a high premium at once. Some of these plans also offer bonuses2 on the plan's maturity that the company declares for the said policy.

    While steady income in the form of guaranteed1 payments ensures that you reach the milestones of your short-term and long-term goals, bonuses2 declared on the plans would add icing to the cake to give you a lump sum that could very well act as a corpus for your retirement.

    These plans also have additional options of choosing add-on riders# that give you enhanced coverage for exigencies like accidental death or disability. One special add-on rider# provided under such plans is called the Waiver of premium rider# that allows all future premium payments to be waived off in case of any permanent disability to the insured. 

 
How to Choose a Savings Plan?

If you are looking for a savings scheme that helps you achieve your milestones, make sure that you check the following features. 

  • The plan should offer the dual benefit of life cover and guaranteed1 income. 

  • The flexibility of paying premiums monthly, quarterly, semi-annually, annually. 

  • Choose a plan that lets you take a loan against the policy in case a need arises.

  • Always opt for a plan that declares bonuses2 at maturity for getting additional lump sum

    pay-outs at the end of the policy term. 

  • Choose a plan that offers additional riders# for death and disability for a better-enhanced cover.

 
Buy Tata AIA Life Insurance Savings Solutions

Savings plans from Tata AIA insurance offers the following benefits:

  • Offers flexibility to plan your future goals with guaranteed1 income.

  • You can choose any of the additional riders# to increase the protection offered.

  • The plan gives you the freedom to pay premiums for limited periods.

  • You can choose to pay your premiums annually, semi-annually, quarterly, or monthly.

  • Get the vested compound reversionary bonus2 and terminal bonus2, if any, on maturity.

  • You have the option to avail of a loan against your policy.

  • You can avail of tax* benefits as per the applicable tax* law.

 
Conclusion

There are essential life goals like retirement planning, and there are major life goals like buying your dream house. No matter what your individual goals and your family’s dreams may be, savings plans can help you achieve them on time. With the guaranteed1 income that enables you to check off all the milestones even later in life, these plans give you the financial security you need to safeguard your future. The chances of achieving your future goals are directly proportional to the detailed plan that you sketch and track over years before you reach it. After all, it is always said that. 

 " Dreams are only those...which do not let you sleep well until you achieve them."



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Disclaimer
  • Insurance cover is available under the product.

  • The products are underwritten by Tata AIA Life Insurance Company Ltd.

  • The plans are not guaranteed issuance plans, and they will be subject to Company’s underwriting and acceptance.

  • For more details on risk factors, terms and conditions please read the sales brochure carefully before concluding a sale.

  • This blog is for information and illustrative purposes only and does not purport to any financial or investment services and do not offer or form part of any offer or recommendation. The information is not and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

  • Please know the associated risks and the applicable charges, from your Insurance agent or the Intermediary or policy document issued by the insurance company.

  • Every effort is made to ensure that all information contained in this blog is accurate at the date of publication, however, the Tata AIA Life shall not have any liability for any damages of any kind (including but not limited to errors and omissions) whatsoever relating to this material.

  • 1Guaranteed Returns/Payouts depend on Plan Option, Policy Term, Premium Payment Term and Age at entry

  • * Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfilment of conditions stipulated therein. Income Tax laws are subject to change from time to time. Tata AIA Life Insurance Company Ltd. does not assume responsibility for tax implications mentioned anywhere in this document. Please consult your own tax consultant to know the tax benefits available to you.

  • 2These bonuses are not guaranteed in nature. The Company may declare a Cash Bonus rate annually in advance. The Cash Bonuses if declared will be applicable provided all due premiums have been paid.

  • #Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums, and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch