Best Saving Plans
Priorities change, But plans can Last a Lifetime
In life, we all have different kinds of financial requirements. As a kid when you grow up you are worried about small finances like pocket money, educational fees, enjoy with friends, outing etc. When you start working you aspire to live a lavish lifestyle with good clothes, expensive gadgets, watches, bike etc. As and when you get married your priorities change and shift to child and family security. However, everything comes at a fair cost. You can achieve your goals & fulfill dreams only if you have sufficient savings in your hands. Financial priorities change over time, but a good savings plan lasts a lifetime.
Inorder to enjoy a lavish lifestyle, you need to build sufficient corpus. And this can be done if you start your savings plan early. By starting early you can take full advantage of the power of compound interest. A little bit saved each month starting at an age of 25 beats a lot saved every year starting at age 40.
The article will guide you through some essential steps required for building a successful savings plan:
Identify Saving Goals
You cannot get to your destination unless you have a road map. Having a clear objective of what you are saving for is the first step, whether it is for a family vacation, a TV or second family car. People know they have to save, but if they can foresee their financial goals, it really helps to work towards them.
Determine your Savings
Whether you make Rs 5lakh or Rs 50lakh a year, you need to visualize and prepare a snapshot of how much you are spending and what is the amount I can save upto? Thatis where a budget comes in. Once a budget is in place, you can determine how much you can allocate to savings or if you need to rein in your spending. If you are unsure of the amount that has to be saved consult a financial advisor who will guide you with all the pros and cons along with inflation rates.
Appropriate Saving Channel
There are many ways to save and invest your money such as Life insurance plans, savings plan, investment insurance policies, Guaranteed Investment Certificates (GICs), mutual funds, exchange-traded funds (ETFs) etc. The point is choosing the one that works for you. Choosing the right best saving plans will depend on your short and long term goals, income sources, you’re spending and potential to save. Also you need to realize how quickly you can access your money.
It is advisable that when you see more money there is a strong urge to spend it. Therefore, it is good to set up an automatic debit payment system. This way the required premiums for your savings plan will go on time and you won’t have much option left to splurge around.
Monitor your progress
Take a few minutes every few months to see if you are meeting your savings goals. If you get a salary increase, good do a small party in the first month, enjoy yourself with your family and friends and then straight away head your increment amount towards investing in your savings plan world. There is more for saving when your salary increases instead of cutting you are spending and setting aside that money.
We all plan for the rainy day of our life. So when you plan for rainy day, adjust your saving goals by either removing less important ones or by pushing back the target date for goals you can postpone. For successful and efficient execution of saving plan keep your workbook updated. Review it regularly to make sure you stay on target. Monitor your target dates from time to time to help you stay focused on your goals and build a successful savings plan for your concrete and happy future.