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Saving money is one of the essential aspects of building wealth and having a secure financial future. Saving money gives you a way out of the uncertainties of life and provides you with an opportunity to enjoy a quality life. Putting aside a sum of money in a systematic manner can help you steer out of many hurdles and obstacles in life. It can support you in your hour of need and ensure that your family has something to fall back on in case of an unfortunate event. There are many reasons to save and several ways to save with ease.
Here are some of the important aspects of savings that you should know.
Why is saving important?
The importance of saving money cannot be stressed enough. Saving money provides financial security by helping you cover essentials like healthcare, food and housing. It also prepares you for goals like retirement, house ownership and more. Additionally, savings help you stay afloat during emergencies.
What are the key benefits of saving?
Below are some benefits of saving in a disciplined manner:
Emergency fund
Savings help you build a dedicated emergency fund. Unplanned expenses like medical bills, job loss or urgent house or car repairs can stress you out. If you do not have room for these in your monthly budget, you can turn to your savings. Your saved-up money can offer you access to money when you need it, so you avoid taking on debt during crises.
Life goals and big expenses
One of the greatest advantages of saving is that it helps you achieve a number of different financial goals. Your savings can help you fund your children’s education or even pay for skill development courses for yourself or your spouse. They can cover milestones such as wedding expenses for your children or grandchildren or help you buy a house. You can also use your savings to travel and ultimately live a more fulfilling and stress-free life.
Retirement planning
Savings help you cover your retirement needs. When you no longer have an income coming in, you can rely on your savings and live comfortably in retirement. Savings help you cover your everyday costs along with bigger expenses like medical bills.
It is important to save for retirement from a young age. This offers you the advantage of compounding that grows your wealth over time.
Peace of mind
Savings offer peace of mind. With adequate savings to fall back on, you will likely not be stressed about your expenses or unexpected bills. They can also boost your confidence.
What are the 8 Reasons to Save Money?
Long-Term Security
Among the many advantages of saving is the long-term security it provides you. The future is unpredictable, and financial emergencies can crop up anytime. Saving money allows you to create a safety net for your future expenses as well as unplanned financial needs. The more you save, the more peace of mind you have, as you are better prepared for anything life throws at you.
Saving money is a step towards financial independence
The importance of saving money cannot be understated when it comes to independence. Financial independence plays a critical role in making you self-sufficient. It helps you live life according to your preferences and comfort. You have the liberty and authority to spend your money on the things you like and live a comfortable and enriched life.
Saving money enables you to take calculated risks
Another reason why saving money is important is because it allows you to take calculated risks. When you have enough money, you can take risks like starting a business, changing professions and exploring your interests without the immediate pressure of generating income.
Savings Reduce Stress
Having adequate savings enables you to live a more fulfilled life. You are more likely to be less stressed about your future goals like retirement or unexpected expenses like healthcare. Savings allow you to be relieved and at ease, knowing you have sufficient funds to navigate different situations in life.
Compound interest can be benefited from savings
Savings offer you the opportunity to take advantage of the power of compounding. Compound interest is added to your initial savings at periodic intervals, such as annually. In the next compounding period, the interest is added not just to your initial amount but also to the interest previously earned. Over time, this helps you increase your savings and beat inflation.
Children’s Education
One of the key reasons why saving money is important is that it helps you prepare for your children's education expenses. It ensures your child can pursue the best academic opportunities without the burden of student loans or other forms of borrowing.
To start a Business
Savings can play a crucial role in helping you start a business. It gives you the financial freedom to fund your venture and turn your passion into a source of income. With savings, you can have more control over your business and reduce the need to rely on loans or investors.
Medical Expenses
Savings can help you cover unexpected medical expenses. While health insurance is essential, it may not cover all types of costs. In such cases, your savings can help you manage emergencies without financial stress.
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Why is saving important at different life stages?
The purpose and approach to saving can change with age as your responsibilities evolve. Here’s why saving money is important at different stages of life:
Students and young professionals
Students and young professionals can build financial discipline through savings. Saving regularly at this stage helps you cover your education bills, living costs and offers you the space to focus on your academic and career growth. Moreover, saving from a young age gives you more time to build wealth and potentially benefit from compounding. You can use this wealth to start your own company or for travelling to different places across the world. Saving money from young age gives you the head start to become financially independent and retire early.
Families and parents
When you start your family after marriage, your savings can help you provide for your dependents. They offer financial stability to you and your family and help you ensure a safety net. They can also help you reduce your reliance on debt.
Retirees and senior citizens
Retirees can enjoy financial independence and security with savings. Your savings help you cover your daily needs, non-essential expenses like travel and leisure and pay for health-related costs. While you would not have a salary in retirement, you can count on your savings for all your needs without having to depending much on friends and family.
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What are the best tips to enable savings?
If you are new to savings or find it difficult to stick to your objective of saving, then you can try the following steps.
Limit your credit card usage
Credit cards may provide a temporary sense of relief, but the high rates of interest can deplete your savings in no time. It helps to limit your debt and restrict credit card purchases to ensure that your savings are intact and growing.
Keep a track of your expenses
If you find it difficult to save regularly, try to record and keep a track of your monthly expenditure. This will offer you a clear picture of where you spend. You can then identify the things that are not important and aim at saving more by avoiding those purchases.
Create a budget for savings
It helps to devise a budget for each month. You can create a plan at the beginning of the month to target savings and set limits for spending. This lets you focus on what is important, reduces the chances of over-spending, and lets you save as planned.
Invest in long-term financial tools
When you save, it is also important to see your savings grow with time. Investing your money in a long-term investment plan can have many additional benefits. These plans offer a lucrative rate of interest that lets your money retain its value and beat inflation. One such instrument is the savings or endowment plan.
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Savings Plans Offered by ICICI Pru Life
A savings plan offers the dual benefit of life insurance and savings. These plans help you financially secure your loved ones in case of any unfortunate event with a life cover1. At the same time, they help you save money and achieve your financial goals such as travelling, buying a house, child’s education or marriage, being financially independent during retirement and more. These plans are not market-linked. The amount you receive from these plans is fixed at the time of the purchase of the plan.
ICICI Pru GIFT Pro is one such savings plan that provides guaranteed$ income along with financial security.
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What makes ICICI Pru GIFT Pro suitable for you?
A savings-oriented insurance plan like the ICICI Pru GIFT Pro can help you cater to diverse financial needs. This customisable life insurance plan offers financial security to your family through a life cover1 and enables you to achieve your future financial goals with guaranteed$ benefits. This plan also comes with the MoneyBack Benefit3, which allows you to get a percentage of your total premiums as a lump sum. You can choose the percentage of your premiums you want as a lump sum and when you want to receive the MoneyBack Benefit3.
$Conditions apply
Below are some key features of the plan that make it suitable for everyone:
Flexibility to choose the Guaranteed$ Income option4
One of the benefits of saving with ICICI Pru GIFT Pro is the flexibility to customise how you receive your Guaranteed$ Income. You can choose to receive income that remains the same throughout the income period or opt to receive income that increases by 5% (simple interest) every year. This flexibility allows you to tailor the plan according to your financial requirements.
Withdraw future benefits as a lump sum
With ICICI Pru GIFT Pro, you have the option to convert all future Guaranteed$ Income and the MoneyBack Benefit3 into a lump sum at a discounted rate. You can choose to receive this lump sum at the time of maturity or any time during the income period. This ensures that your funds are available to you and your loved ones during emergencies or in case of an unfortunate event.
Choose income on any date of your choice5
This plan offers the flexibility to choose the exact date on which you want to receive the Guaranteed$ Income. This is called the Save the Date5 feature. This allows you to align the returns from the plan to your major expenses such as paying for your child’s higher education, a payment for your new home and more.
Life Cover1
ICICI Pru GIFT Pro offers a life cover1 to help you financially secure your loved ones in case of an unfortunate event. The life cover1 amount helps ensure that your loved ones can continue to pursue their goals without compromises. At the time of purchase, you can also choose the “Low Cover Income Booster” option. With this option, you can receive higher income in exchange for a lower life cover.
Tax6 benefits
With this plan, you can get tax6 benefits of up to ₹ 46,800 per annum on the premiums paid under Section 80C of The Income Tax Act, 1961. Additionally, the returns received are exempt from tax under Section 10(10D) of The Income Tax Act, 1961.
$Conditions apply
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