In today’s world, we all know how important it is to have money. Money gives you power and support in several ways. Saving money will lead you to escape from all the financial emergency. There are many countless reasons to earn and save money. It is worth a step to save small amount s to your savings as we say, “A drop of water makes the ocean”. Now the question is how much should you save or is it worth saving a small amount like Rs 2000?
Saving 2000 Per Month, Is It Worth And It’s Importance
Many people think saving 2000 per month is valueless because even if you save it for a year, it will only give you rupees 24000. Saving is never worthless; You may think Rupees 24000 is not a big amount, but it will give you a habit of saving money and investing. And this always work as an emergengy fund. At the time of emergency even a penny is useful and this amount will surely help you at the time of trouble. It’s always profitable even when you don’t invest it in big funds or investments, it will still help you in other ways. It is a well known saying Power is money and money is power. By having a good saving, you will always have back support and confidence to face any sudden situation in your life.
What Are The Plans Where You Can Invest Rs 2000 Per Month?
Systematic Investment Plan or we can say SIP is the most common investment plan. Investors can add small amounts like 500-1000 Rs.per month and build a substantial fund. Mutual funds allow you to invest money from a very low amount. So, if you are planning to start investing Rs.2000 monthly, you can go with the following mutual fund’s options :
I. Large Cap Fund :
Large-cap fund companies are big well-reputed, and well-established companies that are trustworthy. The top 100 companies are counted in large-cap fund companies. Funds which are invested by mutual funds in large companies are then called large-cap equity fund.
To invest rupees 2000, best investing funds are:
a. SBI Bluechip Fund :
. Groww app. rated 4-star in review to this fund.
. Rs.17869 Cr of AUM.
. A time period of 10 years.
. The top portfolio of SBI blue-chip funds are SBI, HDFC Bank, ITC, Mahindra and Mahindra Ltd, HPCL, Hero motocorp Ltd, etc.
. Rs. 500 as minimum SIP.
. Equity share of 91.3%, cash of 7.9%, and debt share of 0.7%.
. Best for investments for a long duration.
b. Reliance Large-Cap Fund :
. Return profit of 11.89%
. Rated as 5 stars by Groww.
. Provides AUM of Rs. 4149 Cr
. A time period of 10 years
. Top portfolio holders are HDFC bank, SBI, ITC Ltd, Tata Steel Ltd, Axis bank, etc.
. Minimum SIP of Rs.100
II. Midcap Fund :
The mid-cap fund is the investment companies between small-cap and large-cap. There are nearly 100-250 mid-cap companies.
To invest Rs.2000 in midcap best funds are –
a. L&T Midcap Fund
L&T Midcap was started on August 09, 2004. It provides a return of 21.75%.
. This fund has been rated with 5 stars by Groww app.
. Provides Rs.1323 Cr AUM
. A time period of 13 years
. Portfolio holding these funds are The Ramco cement, Engineers India Ltd, Jindal steel, Sundaram Finance Ltd, etc.
. Return SIP of min Rs.500
III. Small Cap Fund :
In the small-cap fund, the manager invests a large portion of investor’s money in small-cap companies stock. Small-cap companies are small companies apart from large and mid-Cap companies in the market :
a. HDFC Small Cap Fund
. It has given a return of 16.60%
. HDFC Fund is rated with 5 stars with Groww app.
. AUM stars.2152 Cr.
. The time period of 10 years.
. Companies holding these funds are KEC Industries Ltd, Balkrishna Industries Ltd, etc.
. Minimum SIP of Rs.500.
ii. L&T Emerging Business Fund :
. This fund has given a return of 30.98%.
. 5-star rating by Groww app.
. AUM of Rs.4286 Cr
. It consists of nearly 3 years
. This fund’s portfolio stocks are Sobha Ltd, Rane Holdings Ltd, Aarti Industries Ltd, Future supply chain solutions Ltd, etc.
. Minimum SIP of Rs.500
How Is Saving Money Important In An Investor’s Life :
1. To Meet Emergencies :
Building an emergency fund is difficult, but it is important to have an emergency fund. It takes months and years to maintain an emergency fund. An emergency can occur suddenly in one’s life, but full planning and amount should always be there so that situation does not get worse at emergency time. You can put your money in separate banks or investments. A situation which comes under emergency funds are :
a. Emergency is unexpected.
b. You can not take the amount in need or desire for something else.
c. The situation is unplanned.
d. Urgency or situations which cannot be postponed are involved.
2. Retirement :
It is a person’s choice whether he wants to live his future on his savings or by depending on others. Retirement accounts are there to save money, which is valuable and gives good interest. In compounded interest, money grows faster. You can take a small amount from your earning each month and see the fruitful result after some years.
3. Housing :
The commercial benefit of savings is you can quickly repair your house or purchase your dream house from your savings. Instead of taking large interest rate loans from banks or other investors, you can use your own saved money.
4. Education :
No one has the idea of how small savings from the early years can be helpful in their future. It’s good to party and enjoy your life, but along with it, you should always be careful about your career, needs, and future.
5. Medical Emergency :
Any person can get sudden medical emergencies like surgery, sudden illness, or accident. It gets worse in such a condition when you don’t have enough money to pay; for such conditions, savings are helpful as medical emergencies can not be postponed.
6. Travelling Or Fulfilling Your Dreams And Desires :
We need money and a good investment to plan long trips or fulfill big dreams, desires, or wants. We can spend our money in such situations if you have already saved a lot that is required.
7. Family Needs/ Sudden Loss Of Job :
Having a family means having a responsibility which you need to take care of. A family problem/crisis or sudden loss of a job is a very common problem. Sometimes it may give loss in a huge amount, all together at such places you can use your saved money.
Few Steps You Can Take For Saving A Few More Rupees :
a. By Reducing Electricity Consumption
Smartly using electricity will automatically reduce your 50% electricity bill. Turn off unnecessary switches and lights in your house. Unplug the device when not in use. Check the switches before leaving the house. Reduce the heat production in the kitchen and surround your house by growing more trees. Reduce the use of the refrigerator and air conditioner when not required.
b. By Using Public Transport
By using Bus as public transport, can easily save up to 30 to 40% off your earning. Petrol and diesel are very high in cost, along with that, extra payment charges and servicing of your vehicle can also be reduced.
c. By Maintaining Grocery List
Grocery shopping, like fruits and vegetables, is essential in every house. You can save up to 25% by purchasing items from weekly markets rather than purchasing from a smart market or Thelawalas.
d. Entertainment And Fun
We all love having parties and enjoying dinner at our favourite restaurant. Instead of going outside and wasting money try to stay home. Order from the discount offers given by different apps. You can start having a house party or movie dates once a month.
e. By Avoiding Bad Habits
If you are regularly drinking or smoking, you can just quit or reduce your addiction. Not only for Savings, these habits and not good for your health too. Sometimes these addictions result in destroying many lives. So it’s better to have a safe and healthy lifestyle.
f. Recharge The Gadgets In A Smart Way
Everyone wants separate mobile recharges on their mobile phone. Instead of paying money on different -different mobile, a family should go with a suitable Wi-Fi plan. For calling and video calling, you can opt for WhatsApp and Skype calls.
g. By Maintaining A Monthly Diary
Maintaining a diary has always been the best way to maintain records. From the very first day of the month start noticing every single pie you spend every day. At the end of the month, you will automatically notice where all you went wrong from savings so that you can change those habits from next time.
Adapt The Habit Of Saving Money
A person should adopt the habit of saving money from a young age and saving money and plans for saving money both changes a person’s lifestyle. Even if you save 10 rupees per day, it will become your habit and a routine. Having such habits is an education in itself. The habit of saving saves you from spending money on unnecessary expenses and will also control your bad habits.
It equally affects the life of investors. Imagine an investor A saving his pocket money from early-stage and another investor B who wastes all his money. Investor A will have more experience and plan to manage investments because he has built the habit of saving, and because of experience, it will be easy for him to manage and earn more money in his future.
How Much Should A Person Save From Their Monthly Income?
As per the rule of thumb, A person should save at least 20% of his income. For example: if a person earns 20000 per month, except his serving and expenses, he should take 20% that is 4000 out from it and invest in his savings.
Some Plans Where Some Small Savings That Can Help You Invest Your Money :
1. Short Term Savings :
Short terms are the savings goals that will be used within three years. During any bigger financial emergency, small taxes and other bill payments seem to come often frequently. By short-term savings, it will be helpful to clear such expenses. Emergency funds are included in short term savings. An emergency fund can include:
. Card payments.
. Car repairs and services.
. Paying bills.
. Health problems.
. Home repairs.
You can apply for money marketing account, savings account, certificate of deposit for short term savings. A small amount from your salary can be added to it monthly. Money market account demands a large amount but also pays higher interest rates. Maintaining a separate account will help you to start a habit of savings from short term savings.
2. Medium-Term Saving / Midterm Savings :
Medium-term savings are the goals that will be achieved within 3 to 7 years. Medium-term savings are almost similar to short term savings. Strategize a goal for what you want to save money and then start adding money to it with time. It will give you a good result. Mid-term goals can be invested in buying a new car, a new roof, paying for any loan, resetting home interior, saving for higher education, wedding, etc. You will find many money-saving vehicles in the market, matching your goals. Stock Mutual Funds or a balanced fund can be used for investing in higher education. After a few years, you can move the fund into a market money or savings account.
3. Long Term Savings :
Long-term savings are the savings goals that will be used in the future, most probably after 7 years. Long-term savings are most important and hard to achieve as compared to short term and midterm. Proper planning and investment are required in such planning because of its higher cost. Retirement is one of the most important sets of saving plan because it can last for 30 years or more. Another long term saving goal is for a child’s education. If you start saving from a child’s birth, you will get 22 -22 years to save; you can also save for down payments of the house. There are many investing and saving vehicles for long-term savings. Long term saving is usually done for a better and bright future. A small amount saved from today itself will be helpful somewhere there in the future.
Once the planning of goals is decided, you can cultivate the habit of saving every small amount from your earning. The future is never granted, but you should always have security and saving so that if any emergency occurs, you will have the will to face. It is worth to save small amounts because saving every coin counts. Saving gives you a good habit and a better lifestyle. It will be easy to invest in the future according to your plans. Hence, small savings are beneficial than large once.