As the new year beckons, you must be keen to make savings plans for the future. One thing that 2021 taught all of us is that uncertainties can hit us at any time. With a lot of people suffering from loss of jobs and pay cuts, 2021 has been harrowing for most Indians. But, as the economy is slowly recovering and things are getting back to normal like before, you must look ahead and create a savings plan for the new year that can hold you in good stead in the future.
Here are a few tips that can help you get started:
Create a budget
One of the fundamentals of creating the best savings plan is having a budget. When it comes to savings, you must always abide by the rule – save first, spend later. This means to ensure that you first reserve a portion of your income towards savings and then use the rest for your expenses. Even for your expenses, it is advisable to create a budget. This will help you exactly pinpoint where you are spending the most and you can cut back on the same to increase your savings.
Define specific goals
Another effective way to increase your savings in the new year is to set a monthly, quarterly or yearly savings goal. For example, you can set yourself a goal of saving Rs. 10,000 in six months. To achieve this, you can start an RD (recurring deposit) and deposit a small amount every month to accomplish your goal.
After your RD matures, you can invest the capital amount and the interest earned in an FD (fixed deposit) and increase your savings further. Having a defined goal can help you stay motivated towards achieving your savings goals.
Invest in different savings plans
Savings is not just about keeping your surplus funds safely in a bank account or a locker. But it is also about increasing your savings and getting valuable returns from it. There are many savings plans that you can choose from where you can invest in a lump sum or invest a small amount periodically.
One of the most popular savings avenues is mutual funds. There are different types of funds that allow you to grow your savings in the long run. You can choose to invest in different funds based on your risk appetite and financial goals. Experts recommend staying invested for the long term to increase your chances of getting better returns.
Know about the tax exemptions
Every year, you may pay taxes, which can take away a significant portion of your income. Hence, as you invest in different savings schemes, you must be aware of the tax provisions that allow you to save taxes. Your contributions in different savings schemes are eligible for tax benefits under different sections like 80C, 80CCC, etc. Being aware of these laws can help you choose the best investment option and maximise your savings.
Pay off your dues
If you have any debts like a car loan, credit card bills, then it is better to repay the same before you start saving. If you have availed any credit, then you must repay the amount along with interest, which can keep spiralling if you leave it unpaid for long. Hence, your priority must be to put aside a portion of your savings towards emergency funds and investments.
Final Word
Now that you are aware of the tips to save for the future, start your savings journey and grow your wealth.
