As we walk out of our childhood days and step up to turn mature enough to handle our own money, our parents teach us, 'A penny saved is a penny earned'. While the phrase diligently highlights the importance of savings, growing up, our elders constantly tell us that we should spend less than we earn and save some portion for future use.
We are growing, so are our expenses, an outlook that Gen Y pins as important on the way towards a modern lifestyle! Since the high rate of unemployment and poverty is prevalent in many regions of the world, educating people on saving and influencing them to save money seems important. Further, while the generation reminds of the importance of regularly saving for having a protection net, here are 5 important and easy ways one can save a lot of sum for present and future:
1. Systematic Investment Plan :
Systematic Investment Plan, commonly referred to as an SIP, allows you to invest regularly a fixed sum in your favoured mutual fund scheme. In SIP, a fixed amount is deducted from your savings account every month and directed towards the mutual fund you choose to invest in. With SIP, one is able to start investing in small amount and reap big returns. Allowing to grow the principle amount at less risk, SIP tracks investments, also brings financial discipline.
2. Gold Bonds :
Being government securities denominated in grams of gold, Sovereign Gold Bonds are secure and safe, allowing to save a bomb for future. They are substitutes for holding physical gold where investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. These bonds offer superior alternative to holding gold in physical form.
The risks and costs of storage are eliminated and investors are assured of the market value of gold at the time of maturity and periodical interest. SGB is free from issues like making charges and purity in the case of gold in jewellery form. The bonds are held in the books of the RBI or in demat form eliminating risk of loss of scrip.
3. Fixed Deposits :
A fixed deposit is a financial instrument provided by banks or NBFCs which provides investors a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account and involves absolutely zero risk by setting the amount aside for furture. It also is the most common way to save and secure the belongings monetarily.
4. Eliminating Debts :
'A penny saved is a penny earned'. While trying to save money through budgeting but still carrying a large debt burden, one can save a lot by spending less than what actually is earned. Once free from paying interest on your debt, money can easily be put into savings where a personal line of credit is just one option for consolidating debt to be better paid off.
5. Save the change :
If not interested in any of the above mentioned major methods, one can any way and always adopt the traditional mode of saving money, those, the piggy banks. With its super safety feature, these involve no risk of loss at all. This saving mode keeps some part of the earned amount aside, untouched and withered. The better part of it while is to break the bank when in urgent need, piggy bank offers no additional income like that of interest or dividend, but is still widely preferred pan India today.