SAVE MONEY, TIPS ON saving money, how to save money

Savings and investment are directly related to two things.

1. Boost your portfolio (Savings)

2. Achievement of your aim.

In life, we all have our aspirations. We need a good/beautiful house to live in. children to be educated in good universities, foreign travels, etc., or sufficient retirement funds so that we live in later life enjoy fully.

Merely blindly savings money is of no use, till we are properly able to invest it so that it grows up significantly. The basic tenet of this chapter is how you are able to save and invest purposefully to achieve financial freedom which is achieved when you have your finances in order. The very first step to saving is to make a budget and start saving.

A budget is a simple exercise where you write up your income and expenses for a  given period.

3. Pay your Debt:- Pay first of all your high interest-bearing debts such as Credit Cards, and consumer and personal loans. Loans such as Home Loan and education loans are productive loans and are mostly tax-efficient could be paid regularly and should be provided in your budget as monthly deductions of your budget.

4. Create an Emergency Fund - Another important step that needs to be adopted is to create an emergency fund. No one when an emergency strikes. Breakdown of a Car, floods in your area, hurricane, cyclones, fire, earthquake,s and pandemic damage life and belongings and your capability to earn, thus creating havoc in your life and earning.

5.  One of the aspects of your savings is that you create an automatic deduction of all your bills and investments, payments, and savings before it is paid into your account. This not only ensures you make all your bill payments but also makes regular savings and investments without fail and you have to manage with your remaining salary.

6. Create an additional source of income;- creating an additional source of income helps you in augmenting your income. This helps you to save and invest faster and your goals are reached faster. It is always good to look for side avenues of income with respect to your profession. If you are gainfully employed then you can further work part-time in the same vocation to give an additional income, which will help you to garner more income. Further, there are many other vocations that can be taken by you to earn additional income.

7. Proper Tax planning:- Much like Death Taxes are a certainty and they will never go away, while rules and plans may change. So plan them well and in advance. There are Tax exemptions under various sections of the Income Tax Act such as 80 C/CC etc. in some types of investments, which not only helps in your savings, Tax savings as well encourage you to take up insurance in health and life. Investment into them provides you tax benefit but also protects you from large hospitalization expenses and also provides monitory help in case of death of Principal earner as per the terms of Insurance. So investments in them add to your Savings or provide you protection. Likewise, HRA may also be part of your salary in such a way that you get the maximum Tax benefit out of it. So, these must be planned well to get the benefits.

8. Invest Invest Invest:- This is the Mantra that helps your money to grow or literally, the money starts earning for itself, or in other words it starts working for you. You get another resource of income. Add as much as a source of income that may surpass your current income and then if you wish you may stop working for the money because your invested income is continuously working for you day and night. In this regard, it is advisable to start earlier in your age to invest and get the benefit of compounding of money. We depict hereunder a table depicting the power of compounding. Herein presuming that we get a growth of12% p.a. by investing the money, then in order to accumulate Rs.1Crore, 2 Crore, and Rs. 5 Crore the amount of SIP installment is needed vis –a –vis one age at beginning investing to get the desired amount.

Age at which one starts investing

 Age 22 Yrs.

 Age 30 Yrs.

 Age 35 Yrs

 Expected amount 1 Crore




 Expected Amount 2 Crore




Expected Amount 5 Crore 





This shows the power of compounding and head start gain if you are an early investor.

9. Get insurance for a sufficient amount.

Insurance is your preparation for Life’s uncertainties.

1.    Get Medical Insurance.

2.    Get a contingency Fund.

3.    Get Death Coverage.

4.    Get disabilities coverage.

5.    Insurance Annuity yields are not productive. Therefore one should separately take Death coverage and invest the other amount separately.

6.     Family floaters should not be taken with old parents. It spreads the cost of their coverage on the whole insurance, thus making it much costlier.

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