8 Interesting Ways To Make Your Savings Grow

Most Indian people have similar traits when it comes to financial habits. The rule of “a penny saved is a penny earned” is embedded deep in my mind. However, with changing times, people need to bring certain changes in how they ‘save’ money. If building a considerable corpus is your goal, be it a long-term or a short-term goal, then just saving money in your bank account is not enough. Your money has to be put to work if you need it to grow at a worthy pace. Therefore saving has to be replaced with investing.

Take a look at some simple yet interesting ways that can make your savings grow:

Make A Budget, And More Importantly, Stick To It:

Start with making a list of necessary expenses you have in a month, like rent, electricity bill, etc. Then you can make a budget for the month. To organise your spending and keep a check on overspending, your budget should highlight how your expenses are related to your budget.

Try to find ways to reduce your set monthly expenses, and learn to classify your needs and wants. Next, identify unnecessary expenses you may cut back on, such as entertainment and eating out. Planning can help your savings in going up by 15% to 20% of your income over time.

You Need To Pick The Right Tools:

For both short- and long-term objectives, there are numerous savings and investment options available. And you are not required to choose just one. You can choose a combination of tools that will help you save money for your goals in the most effective way but first, it is important to understand how each one works and the commitment they need, fee structure, interest rates, the risk involved, etc.

It is important to understand your risk appetite before venturing into different types of investments, as some are riskier compared to others. Some of the common saving options are-

• Unit-Linked Insurance Plans (ULIP): ULIPs are a type of market-linked product that combines investment and insurance. These products are flexible, and the equity-to-debt ratio reflects your risk tolerance.

• Fixed Deposits: A fixed deposit is a type of savings account where you need to invest a lump sum amount fixed amount in the bank at a certain interest rate.

• Mutual Funds: A mutual fund is a type of financial vehicle that combines funds from shareholders and investors to make investments in securities like stocks, bonds, and other assets. Mutual funds are run by professional money managers, who allocate the assets and attempt to generate profit for the investors

Understand Taxes² :

Through various sections of our Income Tax Act, like 80C and 80D, the government encourages investments. Instruments such as life and health policies, tax-saving2 mutual funds, ULIPs, postal saving schemes, home loans and etc., contribute to tax exemptions* on our income. Thus, investing your money is a great way to both save and grow it.

Put Things On Automatic Mode:

In almost all banks, automated transfers are available between your checking and savings accounts. You may decide when, how much, and where to transfer money. You can even split your direct deposit so that a portion of each paycheck gets into your savings account. This way, you won’t have to worry every time about splitting your income and making the deposits in the required product. Also, when you know an amount is going to be auto-debited, you learn to cater to it in your budget.

Keep A Watchful Eye On Your Investments:

The key to savings is not just making investments but also analysing your investment portfolio and tracking your growth. If any investment is not doing well, you can take out the money are re-invest in something that is giving better returns.

Invest In Suitable Health Life Insurance:

Along with all other investments, it is extremely important to invest in health insurance and also life insurance. Our lives are uncertain, and diseases can happen anytime. If you decide to bear the treatment cost out of the savings you have, they may take a serious hit. On the other, investing a small premium in a health insurance plan every year can offer wide coverage against diseases and accidents.

Take Professional Help - See A Financial Therapist:

If you’re not sure how to make your money grow, talk to a financial expert. They can help you in planning your investment portfolio and explain to you how to invest over a span of time to reach the goal you have.

Start Now:

It is never too early to start thinking of investment. Early planning can help you in reaping the benefits over a long period of time while also keeping you in a financially stable position.

Conclusion

While it is very important that you keep your expenses in check, one must also not rule out that relaxation, fun, and celebrations are equally essential. You need to strike a balance between tight belting and splurging. Resist instant gratification and build on spending over things you can truly enjoy. https://www.cnbc.com/2021/12/22/22-ways-to-save-invest-and-get-smarter-with-money-in-2022.html¹ https://bettermoneyhabits.bankofamerica.com/en/saving-budgeting/ways-to-save-money³ https://www.hdfcbank.com/personal/resources/learning-centre/save/8-interesting-ways-to-make-your-savings-grow⁴ https://www.investopedia.com/articles/investing/100615/10-ways-effectively-save-future.asp⁵