Each month when you receive your salary, it feels great to have earned the fruit of labour. A steady income is necessary as it pays your bills and helps you maintain your lifestyle. And everyone likes to spend the rest of the money on their interests and entertainment.
 

However, saving money each month should be a habit, and you need to start somewhere. For instance, savings life insurance policies can be a good way to create your savings fund. Most life insurance companies have flexible savings plans that let you pay a small savings premium each month so that you do not end up with no money to spare by the end of the month.
 

But apart from a salary saving scheme, here are some salary-saving tips save to help you save money each month.
 

Few Simple Ways to Save Money

The thumb rule about saving money from your salary is that you should save whatever amount you can, no matter how low it is. By following these tips, you can get an idea on managing your savings:
 

• Create a Budget
  
  A budget is the most important part of your financial plan when you are trying to save money on a monthly basis. This budget should include the total income you earn, followed by the essential monthly bills and household expenses and then arrive at how much you can save.
  
  For most people with a small income, there may not be much to spare after the basic expenses have been calculated. However, you can always start with a small savings amount and then slowly increase it over the months as and when you earn some extra money or bonus.
  
  Creating a budget helps you understand how much money you can spare and save each month, and by the end of the year, you can save money without compromising the expenses set aside for utility bills and essential needs.
  
  
• Track your Expenses
  
  Even if it is basic needs and EMIs that have to be paid each month, be sure to track the amount of money spent each month before you start saving money. There are various mobile applications that can help you make and track the payments so that you are aware no money is wasted anywhere else.
  
  In case you want to spend money on entertainment and leisure, use the tracking app so that you do not disturb the amount you intend to save in any way. The aim is to ensure that you are able to save money without it affecting your lifestyle.
  
  Also, ensure that you make your payments on time so that you do not have to waste money on paying penalty fees and additional charges each month.
  
  
• Choose a SIP
  
  You can always opt for a less-risk investment option where you can invest your money through a SIP or Systematic Investment Plan. This ensures that the money can be auto-debited each month, and you won’t miss the instalment.
  
  The benefit of starting a SIP is that the amount can be as low as ₹500 or ₹1000 on the basis of your income and how much you can spare. This amount can be gradually increased over the months or years if you start earning more. Investing through a SIP means that you can benefit from compound interest.
  
  If there is an emergency during a certain month, it is safe to skip one SIP; however, for a more disciplined approach and to keep the savings active, do not skip more than 3 consecutive SIPs, which leads to closing the investment.
   

• Use Savings Plans
  
  A savings insurance plan is uncomplicated as you only need to pay a single premium each month, quarter or year, as per your preference. This premium amount will not only create your savings corpus but will also offer life cover protection to your loved ones.
  
  In case of your untimely demise during the policy term, the life cover’s death benefit can help your family financially. And if you survive the policy term, you will receive the guaranteed¹ savings amount as the maturity benefit. With this dual advantage of a savings plan, you not only secure your financial corpus but also protect your family from future uncertainties.
  
  Since savings insurance plans from Tata AIA Life insurance are flexible, you need not pay a hefty premium each month. Savings plans also offer the flexibility of choosing from Single Pay, Regular Pay or Limited Pay premium payment options.
  
  
• Segregate your Savings
  
  Make it a point not to put all your savings in a single account or plan. This is especially valid if you are saving a large sum of money each month. By diversifying your savings, you can choose different tenures of maturity. Hence, by the end of each tenure, you can fulfil some financial goals without it affecting your daily or monthly expenses.
  
  For instance, you should have a savings plan, as well as a bank account, fixed deposit (FD) and a recurring deposit (RD). If you want to save a lump sum amount for the long term, the fixed deposit can help. An RD is better if you want to save in instalments each month and utilise the maturity amount after a shorter tenure.
  
  Likewise, you can also opt for government-back savings schemes such as Public Provident Funds, the National Pension Scheme and so on.
  

Conclusion

Creating a savings corpus for different purposes is necessary. Even if you do not want to save any money for your future goals, you should at least set aside some funds in case of an emergency, such as an illness or the loss of income.

Saving plans make it easier for you to save money and keep a record of your premiums under a single policy. Moreover, you don’t need to pay expensive premiums for your savings policy. You can simply choose a longer premium paying term and a policy term to start a long-term and disciplined savings plan.

L&C/Advt/2022/Sep/2351