Saving money is not a choice but a moral self-obligation. It may not seem important at a younger age. However, it is a basic necessity for the future, and it is something without which you cannot lead a life in the current world. Savings will serve as financial protection to you and your family. In this article, we will try to understand why saving your money is important and how to save money in the right way. These money-saving tips will help beginners in the best possible manner.
 

Why is saving money important?
 

Saving is a practice that introduces discipline in financial planning. It is important to save money for the following reasons:
 

1. There is always a need for an emergency fund to handle uncertain exigencies in life. It might be a repair on home appliances or vehicles, family obligations, special occasions, etc.
2. There is a set standard of living you are comfortable with. In order to have the same standard throughout your life, you need to set aside a chunk of your money. Though your income keeps increasing, it may not suffice your needs and wants always, especially with the exponential growth in the inflation rate.
3. If you are the only breadwinner in the family, financial protection for your family is necessary in your absence.
4. A plan to save is necessary for having a comfortable life after retirement.
    

How to save money the right way?
 

Since it is established that saving money is imperative, you also need to understand how to do it in the correct manner. Here is a step-by-step guide to saving money in the right way.
 

1. Make a budget:

   
   Make a note of all the income from different sources. Calculate the expenses that you incur on a daily basis. Concentrate on the needs more than the wants at this stage. Ensure you consider the expense based on accurate prices for making a reasonable expenditure. Subtract this total amount from the income to derive the amount left for savings.
    

   This budget will give a fair idea of your financial status. You can revise this budget by excluding unnecessary expenses. There are certain expenses in a month where you cannot account for a specific quantum of money. In those cases, you can set limits and track your spending to avoid exceeding them at any given point in time. You can save money if you religiously follow this budget every month.
    

2. Make a financial plan:

   
   Once you derive the money you can save in a month, you must make a financial plan. Consider the short-term and long-term financial obligations and the cost for every aspect. Consider the inflation factors and calculate the necessary fund that you will require at different stages in life. Also, ensure that you extend this financial plan to include post-retirement expenses. 
    

3. Buy a life insurance plan:

   
   Now that you have learned how to calculate the expenses and find the savings amount, you must find the right investment option for executing the financial plan. An insurance plan that offers a regular income will be an ideal option in this context. 
    

   Buying a life insurance plan with adequate coverage ensures that you can secure your family’s financial future. In the event of your untimely demise during the policy term, your family will be able to sustain themselves financially.
    

   A life insurance policy will also help you determine the extent of monthly income you will require at different stages in life and after retirement. Based on these calculations, you can decide on the life cover and the monthly income required to determine the premium amount for the chosen insurance plan.
    

   If the premium amount is not affordable, make the necessary changes to your budget and reduce the expenses accordingly. It is better to save money based on future requirements rather than saving the balance of money after expenses without any motive. 
    

4. Stay disciplined:

   
   Once you make the budget, decide on a financial plan and start investing in an insurance plan to get a regular income. You must stick to the plan and stay invested to derive the guaranteed^@ benefits for all your financial needs. The early you invest and the longer you stay invested, the better your profits.
    

How to guarantee^@ savings and regular income with life insurance?
 

 

It is a savings insurance plan provided by several financial institutions and insurance companies.
 

The premium paid towards this policy is utilised for two benefits. Firstly, as a life cover, ensure a sum assured for your loved ones in the family to help manage their financial commitments when you meet with a sudden demise. The payout from the plan can be utilised for your children's education, marriage, and paying off other debts.

The sum assured can be further enhanced by opting for additional riders^# such as accidental death benefit rider, critical and terminal illness rider. These riders will make the insured amount payable under certain terms and conditions. Secondly, you will get a guaranteed^@ amount on maturity.
 

This guaranteed^@ income can be availed in any one of the following three ways.
 

• As a lump sum amount.
• As a combination of lump sum and a guaranteed^@ annual income.
• As a regular monthly income for a set period or throughout your life based on the product chosen.
   

You can browse through the savings solutions, consisting of guaranteed^@ returns, guaranteed^@ income, money-back and other life insurance savings plans, offered by TATA AIA life insurance.

 

Conclusion
 

Having understood the importance of saving money by investing in a savings plan and doing it in the right way, you must take the necessary steps as early as possible. The earlier and longer you invest, the better your benefits and returns. Also, the cost of availing of such plans can be less when purchased at a younger age. Save money every month, invest in a savings insurance plan, and secure your life along with your family in the right way!

 

L&C/Advt/2023/Mar/0798