Savings for Bright Future

November 17, 2008 by  
Filed under Retirement


Saving a considerable amount of your money on a regular basis would definitely help to meet your future expenses or at the time of emergency. There are lots of ways to save or invest your money depending on your personal profile, dependants and risk appetite. Unless you prepare a savings plan it would be difficult to meet your financial goals.

 

Don’t put all your eggs in a single basket. Try to diversify your investment across Stocks, Mutual Funds, Government Bonds, Term Deposits and Savings Account. Diversification helps to reduce the risk and loss associated with each of the financial products. Cultivate the habit of savings right from the time you start earning. If you start saving your money in a younger age you might not struggle in future.

 

The age around 25 years is an optimal time to start saving your hard-earned money. Our life is filled with major events like marriage, birth of child, death, purchase of new homes etc. A well-planned savings activity would help to meet the expenses associated with these major events. Act wisely so that you don’t regret in future. Make sure you work on allotting some funds for your after-retirement life.

 

Savings Account in a Bank

Opening a Savings account in a Bank should be the first step to start saving your money. Savings account offers the benefit of depositing the money when you have and withdrawing the money when you need it. Apart from the deposited money you may also receive extra money by way of Interest.

 

Term Deposits

Term Deposits or CD (Certificate of Deposit) are a great way to save money for your future expenses. You also get a better rate of Interest while compared to a conventional Savings Account. Always make sure you have some cash in hand to meet your unexpected expenses else you may have to pay a fine for pre-mature withdrawal of Term Deposit.

 

Mutual Funds or Stocks

Investing on Mutual funds will offer great return while compared to Savings account or Term Deposits. At the same time the returns are not guaranteed and you may loose your money. Nowadays many Mutual Funds offer SIP (Systematic Investment Plan) where you save a fixed some of money on a periodical basis. This helps to mitigate the risk of losses.

 

Save Money from your Tax Liabilities

 

You can also save your money by reducing your tax burden. This can be done through eligible investments or contributions. Some of the financial products that may help you to save taxes are as follows:

a)     Long Term Deposits

b)    Close-ended Mutual Funds

c)     Life Insurance Policy

d)    Home Loan repayments

e)     Pension Savings

f)     Retirement Plans (IRA, 401K Plan)

 

If you are not aware of the tax saving investments in your area you may seek the service of a tax consultant or financial planner. These type of investments offer double benefits as they help to increase the money you have and at the same time helps to save your tax amount.

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