In today's fast-progressing world, savings look like a privilege for many people. But, if you understand a true sense of saving money, you should be able to take some amount every month to your future security. There are some very basic, yet effective ways; using which one could start saving money.
Following are some of the best ways to save money:
Recording your expense is the first basic step you need to do in order to save money. For a month, keep a check and record all kinds of expenses you have made. By doing this, you will have an idea of how much you are spending, and where you need to limit your expenditure.
Following the first step will lead you to the second step that is
‘making a tight budget’.
Start making your monthly budget according to your expenses. The main reason for making a tight budget is to control and curb your spending. One of the best ways to save money is to divide the salaried amount into clear expense heads.
For example, you can divide it into 4 broad categories/ portions - 30% on house and food expense, 30% for lifestyle, 20% for savings and another 20% for debts/credits/loans, etc.
As a thumb rule always endeavour to save 10% - 20% from the salaried amount.
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Savings =Income - Expenses
This evaluation will give you a very simple and easy way to save and spend. One important thing that everyone should practice is to make productive use of their Earnings.
Limit all your extra and unnecessary spends. Visualise what all you want to have in next five years, may be a house or a vehicle? And accordingly, start saving with that as an end objective.
The next approach to saving money is by Investing! The main idea behind investing is to generate a regular income or returns in a specific period of time. With time, your investment grows and so does your money. For instance, the value of
INR 500 will not be same in the next five years (if invested!) and it may grow to more! Hence, investing is very important for everyone. However, before investing, one has to first save money!
One way to get closer to your desired goals is to understand the power of compound interest. Compound interest means an interest which is not only calculated on the initial principal but also takes into consideration the accumulated interest over prior periods.
So if you are planning to save money, there are many short-term and long-term investment options that you can consider.
Have Financial goals to save money! Financial set-up can be a major backbone to you at all times of your life. Regardless of your age, setting financial goals is very important. You can target your financial goals by categorising into time frames, i.e., short-term, mid-term and long-term goals. This gives a very systematic and realistic approach to your financial goals. So if you want to save money, start setting your goals by dividing them into time frames.
Mutual Fund Options for Short, Mid & Long Term Financial Goals
Up to 1 Year
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Sub Cat. Indiabulls Liquid Fund Growth ₹2,216.93
₹150 1.6 3.2 6.4 4.3 4.6 6.99% 1M 10D 1M 14D Liquid Fund JM Liquid Fund Growth ₹62.6607
₹1,570 1.7 3.4 6.6 4.5 4.8 6.86% 27D 29D Liquid Fund PGIM India Insta Cash Fund Growth ₹298.622
₹555 1.7 3.5 6.7 4.5 4.8 7.03% 2M 3D 2M 7D Liquid Fund Principal Cash Management Fund Growth ₹2,024.48
₹4,528 1.7 3.4 6.7 4.5 4.8 6.87% 1M 2D 1M 3D Liquid Fund Aditya Birla Sun Life Savings Fund Growth ₹477.445
₹14,783 1.7 3.7 6.8 5.1 4.8 7.39% 5M 1D 5M 8D Ultrashort Bond Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
For 3-5 years horizon
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 2022 (%) Debt Yield (YTM) Mod. Duration Eff. Maturity Sub Cat. Principal Hybrid Equity Fund Growth ₹123.322
₹3,461 7.4 10.6 10.2 17.2 3 7.36% 3Y 5M 3D 5Y 11D Hybrid Equity Edelweiss Arbitrage Fund Growth ₹16.9916
₹5,881 1.8 3.5 6.6 4.7 4.4 6.99% 5M 12D 5M 16D Arbitrage ICICI Prudential MIP 25 Growth ₹61.7925
₹3,308 3.9 6.6 8.6 9.3 5.1 8.23% 1Y 7M 6D 5Y 1M 17D Hybrid Debt Kotak Equity Arbitrage Fund Growth ₹32.7596
₹23,737 1.9 3.6 6.8 4.9 4.5 6.7% 2M 5D 2M 5D Arbitrage Aditya Birla Sun Life Equity Hybrid 95 Fund Growth ₹1,156.62
₹7,277 7.6 12.6 10.7 17.3 -1.7 7.42% 2Y 3M 3Y 8M 16D Hybrid Equity Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
For 5 years & above
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) Sub Cat. IDFC Infrastructure Fund Growth ₹31.358
₹761 16.2 27 32.6 35.3 13.8 1.7 Sectoral Tata India Tax Savings Fund Growth ₹32.9538
₹3,557 11.4 14.9 16.4 22.7 12.8 5.9 ELSS DSP BlackRock Natural Resources and New Energy Fund Growth ₹61.859
₹728 7.5 8 17.4 26.3 12.9 9.8 Sectoral Sundaram Rural and Consumption Fund Growth ₹72.2012
₹1,242 14.3 19.6 17.8 20.4 10.5 9.3 Sectoral IDFC Tax Advantage (ELSS) Fund Growth ₹117.121
₹5,014 11.5 18.2 21 29.6 15.1 4.2 ELSS Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
Two very important thing saving calculator does is-
So, this is how the saving calculator works-
You might have always imagined yourself being financially independent or owning a house/car, or traveling to the best places or giving a good lifestyle to your family and so on… But, to fulfill all these desires the most important thing is to save money’. The more you save, the better life you can live thereof. However, many people tend to Fail in this exercise due to procrastination. So, stop procrastinating and start saving now!
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