Everyone has different goals to accomplish in life. And, for the accomplishment of every goal, you need to have a certain amount with you. For long term wealth accumulation to achieve your goals and financial protection throughout your life, you should invest in a savings plan. So what is investment exactly? It is about creating assets to grow your money exponentially over a while without putting in much effort.
A savings plan is basically an opportunity to help an individual save money in a systematic and planned way, such that he/she can achieve their short-term and long-term goals. Apart from achieving your life goals, it is necessary to save for the emergencies that might come up.
Before choosing the best savings plan, you should go through various plans and check out their specifications. Different insurance providers have different things to offer in their savings plan. Depending on your goals and the premium amount you can pay every month, you can choose a suitable plan.
Here are a few steps which will help you in saving money in a more disciplined manner:
1. Assess Your Life Goals
First comes the assessment of your life goals. Your life goal can be anything, like, buying your dream car or that awaited foreign trip or maybe anything else. Therefore, first, you’ll have to assess your life goals, after which you can start planning for the same.
You’ll have to find out the amount you’ll require to achieve the same. Setting realistic and achievable goals should be your priority, which looks feasible to achieve in the near future, depending on the amount you can save.
2. Consider Investing in a Savings Plan
Like we used to do while we were young, just setting aside an amount may not help. With the different saving plans offered by insurance providers, you should choose a plan which will work for you and your goals. By investing in a savings plan, you can even earn good returns regularly rather than keeping that amount idle.
3. Compare Different Savings Plan
After you’ve decided to invest in a savings plan, you should compare different saving plans. Different plans have different terms and conditions, out of which few might suit your requirement, and a few might not.
While comparing several saving plans, you should necessarily lookup for their interest rates, the minimum and maximum amount to be contributed, and the taxability of returns. You can save a fair amount of tax on the returns if you choose the right policy.
4. Check Your Income
The most important thing to consider before investing in any savings plan is the premium you can afford to pay at regular intervals. Considering your regular expenditures and other liabilities, you should calculate the premium you can pay.
If you cannot manage to pay a higher amount every month, you should at least start with saving a small amount, which you can eventually increase with the increase in your income.
5. Use A Savings Plan Calculator
After you’re done with the necessary assessment and calculations, you need to know the premium estimate you’ll have to pay by opting for any savings plan. You can easily calculate the premium amount you’ll have to pay regularly using a savings plan calculator by giving in the basic details.
6. Choosing The Appropriate Savings Plan
After evaluating the premium amount payable, you can go ahead and choose the best savings plan to achieve your life goals and prepare for financial backing for your family.
Factors To Be Consider While Investing in a Savings Plan
Before you invest in any savings plan, a few factors to be considered are:
1. Understand the Tax Deductions
While you invest in any savings plans, tax deductions under Section 80C of the Income Tax Act, 1861 should be considered. You can save taxes on the amount you invest.
You should invest in a savings plan with enough liquidity, such that the amount can be used in times of emergency.
3. Performance of the Plan
You should not invest and forget about your plan. You should keep track of your investment portfolio and keep analyzing the performance of the same. Accordingly, you can make changes in the same.
4. Terms and Conditions
Before investing in any savings plan, you should know the terms and conditions specific to that plan. If there’s any confusion regarding any clause, you should clear that out in advance.
Investing in a savings plan is a good way to save money and earn returns over time to achieve your life goals. Without such decisions, it might get difficult for you to save, and your dreams will appear to be far-fetched. Start saving from today itself to plan achieving various goals in the future.