If you have started working with a salary of INR 18000 then you need to start thinking about saving money. Saving money is one of the most important things that a person should do. Freshers usually make the mistake of starting this habit a bit too late. Most the people think that they should start saving money only after promotion. Well, if you are thinking like this, then you are in the wrong path. A person should start saving money as soon as they start working. Though it might be difficult with a small income, one can always try.
By practicing the art of saving money, a person will be able to know the various methods which he/she can use. Even if your salary is less, you can start with some simple steps. When you get an appraisal, go for a nice savings plan.
The essential thing about saving money is to convince your mind to start this habit. Once you convince your mind to save money, you will find that it is easy to save money. There are various tricks and tips that you can use for saving money.
Tricks To Save Money With Low Income Of Rs 18000
The first thing which we do when we get a pay-check is spending it on debts, rents, and other essentials. After doing that, we start spending the remaining amount on partying and other things. We only think about saving money when we have nothing in the account. This is one of the greatest mistakes that people make. There are tricks which you can use to save money effectively.
Below are some of the most useful tricks which will help you in this matter.
1. Paying Yourself Monthly
Make it a point to pay yourself monthly. Whenever you get your monthly salary, pay yourself at least 5% of the salary first. Start doing this as a habit, and you will learn how to save money. If your monthly salary is low, then you should make it a point to pay yourself some part of your salary.
By doing so, you are saving money for your better future. Open a savings account for transferring this small part of the money. Do not apply for a debit card for this account. Keep on transferring small portions of your monthly salary to this account.
Opting for a savings scheme with low income might land you in big trouble. Instead, you can practice these simple methods to save money from your monthly salary. If it is becoming difficult for you to save 5% of your monthly salary, start at 1% and then proceed. Once you start getting habituated, increase the percentage of money for saving.
Do not start saving money hastily. Think before you take any step. You need to convince your mind that you can save money. By saving 1% of your income, you will not feel much of a difference. Your mind will convince you that you can survive even without that 1% of income. Slowly start increasing the amount and practice the art of saving money.
Moreover, you need to keep in mind that you are saving money for your better future. By saving money now, you will be able to have a secure life after retirement. Besides that, by saving money you are preparing yourself for any significant changes in the future.
2. Endless EMI Payments
If you are having any kind of debt or EMI then continue paying the debt even when the debt is cleared. Why? Because when you start paying your monthly EMI to clear the debt, you prepare a suitable budget. This budget helps you to survive even after paying the monthly EMI.
Your mind is convinced that you can continue living even after paying the EMI amount. Take benefit of this thinking and deduct the EMI amount every month from your account. Once you clear off your debt, deduct the monthly EMI, and transfer it to your savings account.
Let’s say your EMI is 2000 bucks, and you cleared your debt last month. When you receive the salary for this month, deduct the 2000 bucks and transfer it to your savings account. By doing so, you are saving money and even maintaining your budget. In this case, you are not only saving money but even surviving on the current budget.
It is the human tendency that whenever we clear our debts, we feel the urge to spend the extra money. Try to suppress that urge and transfer it to your savings account instead. It’s not like you won’t be able to survive without that extra money. You can still live comfortably with your current budget plan and save the EMI amount. These savings will further help you in times of emergencies and need.
3. Do Not Depend On Annual Bonus
Most people depend on annual bonuses for most things. Generally, people depend on such perks to handle the cost of their living. If you are doing so, then you should stop it immediately.
Plan a budget based on your monthly income and not on your annual perks or hikes. Plan a budget that only includes your monthly income. Make sure to save a bit of the money from the budget too. Do not start saving money after you spend the whole amount. Save money when you receive a monthly salary and then spend the remaining amount.
A person gets a bonus and appraisal every year. If you are planning to depend on your bonus to clear off your debt money, then you need to change it. Plan a budget that includes every essential thing and follow it. Make sure to save money, clear debts, and use the remaining money for your essentials.
When you receive your annual perk, then try saving some amount from the hike. At least try to save 50% of the bonus amount and then use the remaining money for other purposes. This does not mean that you should spend the remaining amount carelessly. Make a plan and then spend the money based on it. Say, if festivals are in next month and you have got a bonus. Try to save 50% of the amount and then use 50% of the amount on gifting things at festivals. Though the amount might not suffice, you can try doing this. Moreover, it is advisable to save money for festivals beforehand. By doing so, you will be able to save tons of money.
All you need to do is be wise enough to save money. When you get your annual bonus, do not spend the whole amount on festivals and holidays. Save some part of the amount and then use the remaining part for your essentials.
4. Give Yourself A Generous Tip
Now, this might sound absurd but practice giving yourself a tip from time to time. When should you give yourself a tip? Whenever you spend some money on groceries or shopping, make sure to tip yourself at least 40 bucks.
Why should you give yourself a tip? By giving yourself a tip, you are practicing how to save money. Yes, it is difficult to save money with a low income, but you can always have a piggy bank in your home for this purpose. Give yourself a tip of 40 bucks when you buy groceries and put it in the piggy bank.
By doing so, you are saving a small amount for yourself. When you start doing this, you would have a nice amount of money in your home. Make sure to give yourself at least a 5-10% tip every time you go shopping. This will help you to get habituated to saving money. Further, when you open your savings account, you will find it easier to save money.
These simple habits are the basics of saving money and are used widely. Parents use this technique to encourage their kids to save money. Instead of going towards advance saving practices, it is better to start from the basics. Start by saving a small amount and then slowly proceed towards saving more money.
5. Budget Plans
Making a budget is the first step toward saving money. You need to create a budget based on your monthly salary. It will help you know your expenses per month and give you a rough idea of how much money you should save.
Though generally, people advise following the 50/30/20 rule, it is not possible to follow this rule with low income. So, it is better to save money according to the budget. Now, how can you make your budget?
When you receive your monthly salary, make a list of how you need to spend your money. List out only the essentials in the list. Include your rent, groceries, transportation, food, and debt money in the list. After listing out the essentials in the list, write the appropriate amount for each thing. Calculate and then deduct that much amount from the salary.
Now, from the remaining salary, save some amount for your savings account. Now, here you would need a specific goal for saving money. Create short-term goals and long-term goals. While short-term goals are small goals like buying a new phone or bike; long-term goals are goals like buying land. In other words, short-term goals take less amount of time to achieve, while long-term goals require a large amount of time to achieve.
Prioritize your goals and then start saving money accordingly. Start with short-term goals and state out the amount of money you need to achieve the goal. Divide the goal by 12, and then you will get the amount you need to save every month for achieving your goals. Based on this calculation, plan out your budget.
After deducting money for essentials and savings account, you will still have some amount left. You can use this amount for your “wants” like partying, movies, and as such.
Make a budget that will suit your goals and will help you in living throughout the month. If you are not able to plan a budget, then you can always look for budget planning apps. These apps will help you in creating the best budget plans. It will manage your money for essential needs, help you in saving money, and even spare some money for “wants.” There are various apps available which you can use for this purpose.
The main agenda here is that you should stick to your budget. The moment you stop following the budget plan, you will find yourself spending money. If you do so, you will be left with nothing at the end of the month.
6. Look For Better Savings Plan
Whenever you think of investing your money in any kind of savings scheme, do your research. Search for plans which provide better returns and higher interest rates. There are tons of saving schemes that you would find in the market.
There are mutual funds, term life insurance, and many more. How to choose the perfect savings plan amongst this mess? Research. Research on all types of savings plans and get to know about each one of them. There are pros and cons in every scheme and you need to see which scheme has fewer disadvantages. Choose the scheme which will not harm your savings at all.
The process might be lengthy but, if you want to save money, then you need to do this research. Meanwhile, you can use postal saving schemes to save money. Open a recurring deposit account in your nearby postal and deposit money every money. The advantage of this service is that it is completely risk-free and safe. Though the interest rates are not that high, at least your savings are safe.
So, unless you find yourself a perfect savings plan, it is better to use postal service for the time being. There are services like PPF and NPS which are made by the government. But, before investing in these schemes, you need to learn about them. Know about the services and consult people who have used these services for advice. After going through research, select the perfect plan and then transfer your savings.
You need to remember that your future depends upon the type of plan that you are going to choose. Based on that, choose the best plan for yourself.
7. Managing High-Interest Debts
Most of the people have debts when they start working. Here, the majority of people have student loans, most of which have high-interest rates. Once you start working, you should start repaying your debt as well.
You can only save money after clearing off high-interest debts. Tackle the high-interest debts first and clear them as soon as possible. Once you clear off these debts, you would be able to save double your current savings.
Increase your monthly EMI to clear off the debts and plan a budget accordingly. Though it would be a bit difficult, it is better to clear off the debt within 1 year rather than extending for 4 years. Hence, make a plan and talk to the bank officials. Design your budget and start paying off your debt immediately. Once you clear off this debt, you will be able to save money more easily.
While you are clearing your debt, use simple saving methods like RD accounts or use a piggy bank. Save around 1-2% of your monthly income while clearing off the debt. After the debt is done, increase the percentage of savings and start following it. Remember, even when you are clearing off the debt, you should not stop saving money.
Once you stop saving money, you will find it difficult to start the habit again. Adapt the habit of saving money and stick to it. Even when you are having only 2000 bucks remaining in your account, try to save at least 100 bucks from it. If you get the habit of saving money, it won’t be difficult for you to save when you clear off the debt.
Most of the freshers make the mistake of clearing the debt and then start saving. It seems an easy way and most people follow it too. Do not opt for this path as it will become difficult for you in the future. Even when you are clearing off your debt, make sure to save some part of your monthly salary. Make it a point always to save money no matter what your monthly income is. The minimum you can save is 1% of your salary every month.
8. Turn To Passive Income
Passive income is the income that a person gets without being actively involved in the job. In other words, passive income is another term for a side hustle. If you are having a low income, it is better to look for a side hustle.
A side hustle can be anything like an internship, over-time, or working in any café or nearby store. By having a side hustle, you will get a few extra bucks in your monthly salary. You can save this amount and later use it for your goals.
Moreover, if you have a passion, it is better to use it for an extra income. Let’s say you have a knack for sketching. You can use it for getting a few bucks. You can make sketches for your friends and then take orders from social media websites. Moreover, you can start your channel and teach people tips for sketching. By doing this you will not only get money but will even be able to get satisfaction.
The reason why I am suggesting you use your passion for earning is that, when you do something you love, you won’t feel any kind of pressure. Instead, you will feel an urge to work more in this field. So, why not use this passion to earn a few bucks? It will help you in many ways. Most of people are turning their passion into a career too. But before doing that, one needs to start from the bottom.
If you love writing, you can start your blog; if you love reading, then start creating book reviews and so on. Opportunities are everywhere, and you can get one if you look around. Use your passion for your betterment. Instead of working extra hours for some extra bucks, why not spend that much time doing something you love, which will give you money? Take one step at a time, and you will slowly find the whole path in front of you.
9. Invest In Gold
Gold is one of the safest forms of locking your money. Though it might seem a bit confusing, the gold investment can help you in many ways. When you are investing your money in gold, you are locking your savings.
It helps you to avoid spending your savings and keeps you focused too. This is useful when you are starting to save money for long-term goals. When we start saving for a long-term goal, we get the urge to spend a huge amount of money on trivial things. By investing the money in gold or silver, you are saving yourself from spending the money.
Besides that, gold and silver provide higher returns than other investments. The reason for this is that the price of these 2 metals keeps on changing. If you sell the gold when the price of the metal is at its peak, then you will get a huge profit.
Make it a habit to invest in at least 2-5 grams of gold every year. Calculate the price of gold and then start saving accordingly. This is one of the best ways to lock money and get higher returns at the time of need. When you have completed your short-term goals and want to start the long-term goals, start investing in gold.
It is difficult to keep oneself motivated when saving for a long-term goal. It is better to invest in gold as it will keep you focused. You will get a short-term goal, which will ultimately help you in your long-term goals.
10. Prepay Your Loans
Most of us take unnecessary loans for various things. Apart from student loans and home loans, everything else is a type of personal loan. Even when a person is capable of buying a phone of 50,000 bucks, he/she takes a loan for buying the phone.
Though it is not necessary, people still take personal loans for various reasons. The interest rates for personal loans are relatively high as compared to that of home or student loans. How can you decrease the interest rates of personal loans? One of the most effective methods to reduce the interest rates is by prepaying the amount of the loan.
When you start prepaying your loans, you are not only reducing the interest rates, but you are getting a chance to close the loan before the due date. Most of the banks and loan-lenders close the loan when the person pays the whole loan amount.
By doing this, you will save yourself from paying the interest money on the loan. If you are having a high-interest debt, then it is better to opt for this option. Try to pay the whole loan amount as early as possible as it will spare you from paying the interest amount. Once your debt is cleared, you will get the chance to save money more effectively. Start paying your loans immediately. Another thing to note down, do not to take a loan for any such thing for which you can pay by savings. If you are thinking of taking a loan for a laptop or phone, try avoiding it. Try to save money for the gadget and then buy it. Though, if it’s an emergency then you can go for loans but try to prepay the loan amount before the due period. It will be helpful for you.
11. Fuel Savings
One of the major places where we spend money is on fuel. How can you save money on fuel? Try using public transportation instead of a personal vehicle. It will help you to reduce expenses on transportation. Many cities have transportation cards which you can use for your benefit.
Another thing you can do is to use fuel cards. Most of the oil companies are linked up with certain banks and payment apps. By using the debit cards of such banks, you can earn cashback. Moreover, if you use payment apps, you can get coupons and discounts too. Make sure to note down which cards and apps the oil stations are linked with to get discounts.
If you are using a personal vehicle, make it a habit to send the vehicle for regular servicing and maintenance. It will help in improving the mileage of the vehicle which in turn will help you in saving money on fuel. Regular maintenance improves the performance of the vehicle. This would help you in traveling at ease without having to refill the gas tank from time to time.
Another thing which will help you in saving money on fuel is by inflating the tires for correct PSI. PSI of Pound per square inch is a term that is used to measure the air pressure of the tyre. By inflating the tires for correct PSI will help in reducing the friction on the tires. This, in turn, will help in improving the mileage of the vehicle up to a certain percentage. It will further help you in saving money on fuel and travel a long distance.
Moreover, if you are planning to buy a vehicle, then start looking for efficient vehicles. Look for vehicles that are fuel-efficient and will give nice mileage. Instead of spending money on a good-looking bike, it is better to spend money on a bike with nice mileage. It will help you in saving money in the long run. Once you find the perfect bike, start saving money for it. The price of petrol is rising day by day and during such times if you have a bike which is not fuel-efficient, then you are going to spend a lot of money on fuel. Hence, go for a fuel-efficient vehicle and send it for regular maintenance.
12. Saving On Entertainment
Entertainment is one of the areas where we like to spend money, but sometimes we do overspend in this area. How can you save money on entertainment? Create a budget for your entertainment and then sort it out.
Instead of going out for dinner every other day, you can go to restaurants 2 times a month. Reduce the number of times for partying and clubbing. Instead of “first-day first show” wait for a few days and then go to the theatre for the movie. Moreover, make it a habit to book the tickets from online sites. It will help you to save money and get cashback too. Another thing which you can do is to rent a movie instead of buying the movie from the website. The same goes for games too. You can rent the game for a much lesser price instead of buying the game or movie.
If you have a habit of ordering food from online apps, then try to reduce it. Wait for the right days to order food and you can get discounts. Most of the restaurants offer huge discounts and offers on specific days which can help you to save.
While you are looking for movies, try using coupons. There are various apps that provide tons of coupons if you book your ticket from their website. Look for such coupon apps and start using them. You would observe that even with a small entertainment budget, you can have tons of things.
These are some tips that you should follow if you have a salary of Rs 18000.
Overspending & Ways To Avoid It
Overspending means spending money unnecessarily on “wants.” When you spend more money on your “wants” then it is known as overspending. It is a human tendency to spend money when we receive it.
Whenever we receive our monthly salary, we get the feeling of spending the money, thinking that we have enough money in the account. We realize it later that the money we are spending will harm us. Be it a human tendency, peer pressure or any other reason, we do end up spending more money on our “wants” than we should. This not only ruins the balance of our budget but even makes it difficult to save money. Overspending is the biggest hindrance for saving money.
Though we plan our budget and try to follow it, there are instances when our mind plays tricks on us and lead us to spend money. How to avoid overspending? For doing this, we need to make up our minds and use some tricks. It would help us in saving money and preventing overspending.
There are many ways in which you can avoid overspending. But, the first thing you need to do is make up your mind. Most of the times we think that it is wise to spend money on things we love. But, unknowingly we spend more money than we should. In such cases, we need to plan out our priorities and then make a perfect budget. By sorting out our priorities, we would be able to know the areas where we should spend money. Below are some things which should always be at the top in a priority list.
i. Daily Needs
The first thing which should be in your priority list is your daily needs. Only after managing the daily expenses, you can proceed towards other things in the list. what do daily needs include? It includes your rent, transportation, food, bills and things which you need for the month.
Things like Netflix and Prime subscription does not come under daily needs. They are for entertainment and you can still live without subscribing. But, you cannot survive without electricity and hence you need to pay your electricity bills.
The next thing which is essential for a person is debts. Without clearing debts, it will become difficult to save the money that we desire. If you are having any kind of debts, make sure that you pay the monthly installment on time. After paying the monthly EMI, you will have money for other things. If you are delaying the payment, the interest rates will continue to increase. It is better to manage the debts at a lower level.
iii. Financial Goals
After spending money on the most important things, you need to focus on your financial goals. People save money for achieving financial goals only. If you have a goal of buying a new car or a new home, then you should start saving money for that. After you spend the money on your essentials, save a part of the remaining amount in your savings account.
It will save you from spending the money carelessly. The money that you are saving now, is going to help you in the future.
2. Use the Financial Calculator
The next thing that you can do for avoiding overspending is by using a financial calculator. There are many financial calculators available on the internet. You can look for a calculator which is best for you and then use it for yourself.
Financial calculators will help you to manage your budget and will notify you of a “money deficit.” A money deficit means that the person has a shortage of money to fulfill his/her goals. This particular feature will trick your mind and will make you believe that you need to save money to fulfill your goals. It will prevent you from spending money carelessly.
Financial calculators are highly effective and are used by most of the youth. It helps in planning the budget of the person, shows the amount needed for future goals, and even states the expense that a person can afford. By seeing the results of the financial calculator, the person will get the urge to save money instead of spending it. Download a financial calculator and start using it.
Insurance Policies & Ways To Save Money In It
Various insurance policies can help you in saving money if your salary is Rs 18000. Here, we would tell you about each insurance policy along with the benefits. It would help you to know the insurance policies in which you should invest your money.
1. Saving On Health Insurance Policy
Health insurance is normal insurance which covers all the medical charges of the person. When you buy health insurance, you are getting insured. Your insurance will cover all your medical bills and will make sure that your treatment is done.
Buying health insurance is important for people who do not get any medical facilities from their company. Medical bills and charges are rising every day and, in such situation, buying health insurance is a wise decision. There are various types of health insurance, each having different coverage and benefits. Below are some of the most common health insurance policies that you would find in the market.
a. Individual Health Insurance:
As the name states, individual health insurance is for the policyholder only. Here, the policyholder can avail the benefits of health insurance. Apart from him/her, nobody can use the insurance for getting medical coverage.
b. Critical Illness Insurance Cover:
The critical illness insurance cover is for people who are dealing with severe health issues. This insurance covers the medical bills for severe diseases for which the payment is quite high. It covers the treatment fees, medicines, and all other necessary things. Unlike normal health insurance, this particular insurance will take care of all the bills in case the person is suffering from a harmful diseases.
c. Group Health Insurance:
Group health insurance is used in organizations. Here, the organization provides the employees with group health insurance which would benefit each employee of the company. During the time of renewal, the retirement of former employees is removed and new employees are added to the insurance.
d. Senior Citizen Health Insurance:
The senior citizen health insurance is insurance designed for the people who are above the age of 60. Mostly people above the age of 60 require continuous medical treatments. Hence, this particular insurance is designed for them, which will cater to all their needs.
e. Family Health Insurance:
As the name suggests, family health insurance is for the whole family. Here, the whole family will get benefits from health insurance and can get their medical bills covered. Usually, this type of insurance covers the needs of the husband, wife, and 2 children. If the policyholder wants to extend the limit of the members, then he/she has to pay an extra amount for the plan.
f. Maternity Health Insurance:
Maternity health insurance is made for covering medical treatments and bills during the maternity period. It manages everything from the pre-natal to the delivery stage. This particular medical insurance covers the charges for both mothers as well as the newborn baby. From every check-up to every vaccination, maternity health insurance manages the charges.
g. Preventive Healthcare Insurance Policy:
This particular health insurance policy will help in covering the charges for severe diseases. The preventive healthcare policy will cover all the charges of the treatment for any such grave diseases which the policyholder has.
h. Accident Insurance Policy:
The accident health insurance policy is for covering the financial costs of the treatment if the person had some kind of accident. It will cover the charges for operations, disability and death of the person during the accident.
Why Invest Money In Health Insurance Policies?
How can you save money on health insurance? If you are buying health insurance, then you are sparing yourself from the medical expenses that you might face in any kind of condition. Health insurance will cover all your bills and help you in saving tons of money on medical treatments. Instead of spending money on medical treatments, it is better to buy health insurance which will cover all your medical expenses.
Moreover, most of the health insurance policies are tied-up with certain hospitals. If you do your treatment in such hospitals then you would be able to get cashless benefits. In simple terms, you do not need to pay any cash amount as the insurance policy will pay for all the treatments through net payment. It allows the hospital to settle all the bills directly with the insurer.
Besides that. health insurance policies even have some tax benefits. People who have health insurance can file for an income tax rebate under Section 80D of the Income-tax Act. As per this act, the policyholder can get tax benefits up to 1 lakh when he/she pays for the premium of the health insurance.
There are various health insurance companies that provide tons of schemes. You can go through the policies and then select the one which suits your budget. If you are buying a health insurance policy, you only have to pay once a year and not monthly installments. By paying the premium amount yearly, you will be able to avail the benefits of the health insurance policy.
2. Saving On Life Insurance Policy
A life insurance policy is used for ensuring a financially secure life for the whole family. In case the policyholder meets with an accident or dies, then the immediate family members will get the benefits of life insurance and the money.
People take this insurance to make sure that their family leads a secure life even if some kind of calamity occurs. There are various types of life insurance policies, which are discussed below. How can you save money on life insurance? We will tell you about that too.
a. Term Life Insurance:
Term life insurance is a risk coverage that helps the policyholder in many ways. Term life insurance provides money and other benefits to the immediate family members of the policyholder, in case the policyholder dies. Here, the person has to state the number of years for the policy. If the person dies within the stated period, then the death benefit goes to the family members. In simple language, the term life insurance helps the family in living a financially secure life in case the policyholder dies. This insurance is bought usually by the sole breadwinner of the family. In case the person surpasses the stated period, he/she can file for a return. After filing for the return, the policyholder will get the total premium amount of the insurance. The term life insurance provides higher returns with ow premium money.
b. Whole Life Insurance:
As the name states, this particular life insurance covers the entire life of the person. There is no specific life assured period in this insurance policy. This life insurance will provide benefits even if the policyholder dies at the age of 100. But, the premium charges of this policy are higher as compared to term life insurance. Besides that, the insurance policy even allows for partial withdrawals for the person. The immediate family member will get a higher amount and many more benefits from this type of life insurance. It is one of the safest life insurance policy that a person can use. Though the premium charges are higher, the benefits are also high. Moreover, it would help the person to enable the habit of saving money in a better way.
c. Endowment Plans:
An endowment plan is a combination of both insurance and savings. Here, a part of the life cover is given by the policyholder, while the other part is covered by the life insurance company. If you are buying an endowment plan, then you have to pay a certain amount for life insurance and even state a life period. If you live beyond that life period, then the company will provide you with the maturity benefits. This type of life insurance is also known as traditional life insurance. In this case, when the policyholder dies, the nominee will get the benefit either in installments or during the time of maturity. As you can see, the risk in this type of insurance policy is lower as compared to other insurance plans. It means that the returns are also lower, but it has fewer risks and hence people do opt for this type of plan.
d. Child Insurance Policy:
The child insurance policy is meant for securing the future of the child. It helps in managing and saving money for the education and marriage of the child. While education is costly in today’s world, the child insurance policy will help in covering the education cost. Most of the companies provide monthly installments to the child until the age of 18 for his/her education purposes. In case the parent dies, the child is liable for getting immediate payment from the company. The child gets the death benefit after the insured parent dies, which can help him/her in the future.
e. Retirement Insurance Policy:
The retirement insurance policy helps the person to gain the corpus money for retirement. This particular policy will help the person to live a financially secured life after retirement. In this case, the death benefit is higher than other policies. In case of death of the policyholder during the time of the life assured, the nominee will get the entire amount. It includes premium money, bonus and much more.
f. Money-Back Life Insurance:
The money-back life insurance policy is the type of policy where the policyholder gets some amount of the money in monthly instalments. The benefit that a person gets from this insurance is known as “survival benefit.” Most of the companies use this policy to provide a bonus to the people. If you are looking for saving money for your short-term goals, then this insurance might help you there.
g. Unit Linked Plans or ULIPs:
This particular insurance policy is a combination of both insurance and investment. Here, the person has to pay the premium amount for the ULIP, which will be considered as the risk cover. Part of the insurance money is invested in the funds. This particular life insurance gives the policyholder freedom to invest in various funds like bonds, debts and many more. Here, the person has the flexibility to invest money in any field and get returns based on the investment.
Why Invest Money On Life Insurance?
A life insurance policy is one of the safest policy to invest money. A person can get higher benefits at low investment, which will help his/her family in many ways. This policy is made for the family ad, not for the policyholder.
In case the policyholder dies, the nominee and immediate family members will get the entire death benefit and a lump sum of money from the insurance company. It entirely secures the financial needs of the family after the death of the policyholder. If you are the sole bread-earner of the family then you should take life insurance. Nobody has seen the future and we do not know what might happen at the next moment. Getting life insurance will help the family to get financial help after the death of the person.
Moreover, life insurance is not that expensive. If you are investing in a term life insurance policy then you will get higher returns with a low premium. It is better to invest in such places where the person will get the benefit for the family. Moreover, it even encourages the habit of saving money and assures you that the family will get the financial benefit due to life insurance.
3. Saving On Property Insurance Policy
As the name states, property insurance is done to secure the property of a person. If you are having your own house, land or a building, then it is better to take property insurance for safety. This type of insurance is usually bought by shopkeepers and businessmen who have their shops. But, even if you are having your own home or land, then it is better to take property insurance. It will help you to get benefits in various places. Let’s say you are having your own house which got damaged due to fire or flood or any other thing. The whole house is damaged and it will take a fortune to repair the whole building. Now, if you have property insurance, then you can claim the benefits from the insurance company and save tons of money.
There are various types of property insurance which you need to know before investing in it. Below are the types of property insurance which you can get from the insurance companies.
a. Home Insurance:
If you are planning on building or buying your own house, then you should also buy home insurance. Home insurance will cover for all the charges that might occur due to damages such as fire, earthquakes, and many more. It will help you in saving tons of money in repairing and rebuilding the house. Hence, it is better to buy home insurance for your house. It is a security plan which will help you in covering the damages without spending much money.
b. Office Insurance:
Office insurance is designed for companies that buy a particular office for work. In this insurance, the company will cover all the damages in the office, including all the equipment inside it. This type of insurance protects the company from spending money on repairing the whole office after any kind of damage. Usually, offices have computers, projectors, and many such expensive things, which can cost a fortune, if damaged. Here, the office insurance policy helps in covering the charges for all the things inside the office.
c. Shop Insurance:
As the name states, shop insurance is for people who have a business in the market. If you have a shop for groceries, jewelry or any other thing, then it is better to buy shop insurance. Here, the shop is the sole source of income for the person and the insurance guarantees the protection of the shop from any damage. If there is any kind of damage due to an explosion or natural calamities, then you can claim for the insurance money with the help of shop insurance. It will cover all the charges and help you in repairing the shop.
d. Building Insurance:
This type of insurance is usually designed for a society or a whole building. Let’s say you have a building that you rent out for people. Here, you cannot take home insurance as it won’t be able to cover all the charges. In such situations, you have to opt for building insurance which will cover all the charges for the building.
Why Invest Money On Property Insurance?
Property insurance can help you save money in various ways. One of the major benefits of property insurance is that you will be spared from spending money on repairing your house. Whenever you are buying a house or building a new house, do buy property insurance. It will help you to cover all costs for any kind of damage.
There are various companies where you can get nice property insurance based on your budget. It is better to invest money in property insurance rather than spending money on repairing the whole house after any kind of damage. There are many cases where the shop or house shattered after an earthquake or some burglaries happened. Here, if the person has property insurance, then he/she can easily get the amount for the loss and repair the property. It would help the person in avoiding any kind of expense while rebuilding or renovating the property.
4. Saving Money On Motor Insurance Policy
Motor insurance is for covering the damages to the vehicle caused due to any mishandlings. If you started working and have bought a vehicle, then you should buy motor insurance. Usually, the companies provide insurance to the customers and it is mandatory to have insurance done for vehicles. Motor insurance can help you in saving money on repairs and motor parts which got damaged due to accidents or any other cause. There is 3 basic motor insurance, out of which one is mandatory for every vehicle owner.
a. Third-Party Liability:
This is one of the most common types of motor insurance which every vehicle owner must-have. The government has made it mandatory for having motor insurance. The premium of this insurance policy is quite low and can help in paying for the damage done to the third-party. This particular insurance does not cover any damage done to the vehicle of the policyholder. Instead of that, this insurance policy helps in sparing the policyholder from any legal action by providing financial aid to the third- person affected in the accident.
b. Comprehensive Cover:
A comprehensive motor insurance policy is an advanced version of the third-party liability policy. In this type of policy, the insurance company provides financial aid to the third-person affected by the accident and even covers the expenses for vehicle damage of the policyholder. Moreover, this policy even provides plans which will cover the cost of the repair in case the vehicle gest damaged due to fire, explosion, natural calamity or any other reason. It even covers theft and provides the person with the cost of the bike in this case. Besides that, the policyholder can even add certain things in this type of insurance for his/her betterment.
c. Damage Cover For Policy Holder:
Also known as “Own damage cover,” this particular insurance policy covers the damage of the vehicle of the policyholder. Most of the motor companies provide this policy to the customers. It will help you in getting some additional benefits of the comprehensive cover too. But, you must have the “third-party liability” insurance to avail of the benefits of this insurance policy.
Why Invest In Motor Insurance Policy?
Nowadays the number of accidents is rising day by day. In such times if you have a motor insurance policy then it will help you to cover the cost of your vehicle damage without any problem. We do know that it takes a lot of money to repair a vehicle which got damaged in the accident. Some vehicles need new parts, new dents, and much more. the cost keeps on rising and ultimately all the savings go down to zero.
If a person has a motor insurance policy, then it will help him/her to cover the cost of the damaged vehicle and get spared from the high expenses. Motor insurance policy makes sure that the third-party also get financial aid and spares you from any kind of legal hassle. Besides that, it helps you in managing the expense of vehicle repair too. By getting a motor insurance policy you are saving yourself from the legal hassles and the high cost of vehicle repairing too. If you are buying a vehicle, make sure to get insurance too.
5. Saving On Bit-Size Insurance Policy
Before knowing how you can save money on bit-size insurance, it is important to know the meaning of bit-sized insurance policies. Bit-size insurance is the types of insurance which you can buy for a specific period. In simple language, you can buy bit-size insurance for a specific period and pay the premium for that time only. Here, you need not have to pay the premium every year.
Let’s say, you want to buy health insurance for a specific disease like pneumonia, but not for a long period. Here, you can opt for bit-size insurance from any insurance company and buy a policy for a year or two specifically for pneumonia. After the period, you do not have to pay any premium for the insurance. You can buy bit-size insurance for any reason, like accidental insurance, land insurance and many more.
Why Invest In Bit-Size Insurance Policy?
The major benefit of investing in a bit-size insurance policy is that the premiums are low and you will get benefits for the time stated. You do not have to pay any extra charges for the insurance and it won’t affect your monthly budget at all. Bit-size insurance policy is usually bought by people who want to try out an insurance policy. It is cheap and will provide you with all the benefits as mentioned in the policy.
Insurance policies are the best method to save money. It will encourage you to save money for your better future and will even provide you with tons of benefits. Another reason to invest in an insurance policy is that it will keep you motivated to save money. When you start saving for your long-term goals, there will come instances when you will want to spend. Here, if you have taken insurance, then you will be compelled to save for the insurance. While saving for the insurance policy, you will also save for your long-term goals. Insurance policies help in keeping you focused and avoids you from any kind of distractions. Moreover, insurance policies are also a nice way to lock money. When you are saving money for the premium fees of your health insurance, you are locking your money. When the insurance money attains maturity, you get tons of benefits which will help you. It is better to save money on insurance money rather than spending it carelessly.
Frequently Asked Questions
1. What is the best method to save money with a low income?
2. How can I cut down my expenses from my “essential needs?”
3. Will it be safe to invest in health insurance? I have a salary of 18,000 per month.
4. How can I start a side hustle for extra income?
One can always save money if he/she has the will to do so. Even if you have a monthly salary of 18000 you can still save money by using simple methods. Try using a normal piggy bank for the beginning. Slowly proceed towards savings account and then take the next steps. Once you start saving money, you will find ways to save it effectively. If it is becoming difficult for you to save a large amount of money, then try saving a small amount. Start saving 1% of your monthly salary and then increase the percentage slowly. It is all about experimenting and saving. Save as much as you can. See if you can live comfortably after saving 5% of your salary. If you can do so then save only that much percentage of money for the while. Remember that you should increase the percentage of your savings. Do not stick to a certain percentage for saving money. If you do so then you will not have enough savings for achieving your goals. Moreover, make it a habit to have some goals in your list. Be it a small goal, try to achieve it before proceeding towards a bigger goal. If you are not finding reasons to save money then state out the things that you want to buy or want to do within a period. After writing down things, you will find enough reasons to save money.
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