Monday, 29 February 2016

Start saving for a rainy day the moment you start earning

A person who lands his first job is tremendously excited about finally becoming financially independent. With the monthly salary comes the responsibility of fending for oneself and one’s family. From the time a person draws his first income to the time he retires, he is responsible and accountable for his loved one’s dreams. He realizes that none of his own or his family’s ambitions can be released unless a strict budgeting and savings plan is put in place.

savings plan
savings plan

Our parents often urge us to save small sums of money, even as they give us our weekly pocket money when we are very young. The savings habit is deeply ingrained in our culture – we revere thrift and frown upon ostentatious spending. Though it seems like unnecessary advice at the time, most parents urge their young children to set aside a sum of money from their income for their future. It is sage advice that must be taken to heart – and the savings habit must be inculcated as soon as one starts working.

savings plans in India
savings plans in India

Not adopting a regular savings habit from a young age can have tremendous implications for the future. For one thing, it is a difficult habit to inculcate. It takes perseverance to save money every month in the face of mounting expenses and the needs of a growing family. Secondly, it is even harder to resist the temptation to divert a chunk of savings towards other requirements when the savings corpus becomes a sizeable one. The best way out is to park one’s funds in an investment/insurance/savings plan that will not allow one to periodically withdraw the funds for other uses. At the maturity of the plan, the person receives a large sum of money which he can either reinvest in another plan, or use at the time of maturity.

There are many excellent savings plans in India, which people are taking advantage of to map their financial future. One may set short term or long term financial goals, but only by dint of regular savings can one bring those goals to fruition. In both scenarios, the plan holder gains by regular savings for a certain tenure, and gets a large corpus of money on maturity of the plan.

A person’s goals for the future may encompass short term goals (taking a foreign vacation every two years, for example) or long term plans (such as buying a house by age 35). Either way, a person may invest money regularly in savings plans to build a healthy corpus for the future. Having this fund of money helps keep one’s financial goals on track, and the policy holder need not divert money from his regular expense fund to spend for large expenses such as the ones mentioned above.
Savings plans in India also offer a death benefit, wherein the plan holder’s family may benefit from the corpus in the event of the holder’s unfortunate demise.

No comments:

Post a Comment