Savings

Let's start by word Save

1. Keep and store up (something, especially money) for future use.
2. Avoid the need to use up or spend (money, time, or other resources).

Keep and store up (something, especially money) for future use.

If you save up money in terms of currency, over many years, you won't earn enough interest to cover the increasing cost of living. When your cash fails to keep up with inflation, it loses relative value and you'll have less buying power.

Actually, just holding your money in cash is a bad idea. Although you do earn interest on money deposited in a savings account at a bank, the amount is far too low to keep up with the negative impact of inflation.

For example, everything might have increased over time and even a price of a product or thing. If you buy land a few years ago it was actually cost less, assume 3 lakh, if you try to buy the same land now it might cost more than 3 lakh, like 6 to 10 lakh. Because time changed, things changed, and competition for the same is also changed, this change is incremental.

In short, an increase in price and a fall in the purchasing value of money.

Avoid the need to use up or spend (money, time, or other resources).

It is another kind, the aim is to save explicitly. For example, if you have food and you had enough for the day then you have to save the food to have it tomorrow or the day after tomorrow in one or another way it is more like saving from excess or saving from what we have.

What is savings?

Savings refers to the money that a person has left over after they subtract out their consumer spending from their disposable income over a given time period. Savings, therefore, represents a net surplus of funds for an individual or household after all expenses and obligations have been paid.

So in general it is a process of keeping aside a portion of current income for future use or the flow of accumulating a small part of resources from large resources over a given period of time.

Reasons for Saving:

• To use it emergencies.
• To provide yourself with the freedom to pursue a career that you more like to do.
• Future is inevitable, with financial security you can have more strength in yourself.
• You might have heard from someone they are saving so you do worry about that and you are also into the savings.
• To fulfill your dream or someone's dream completely.
• For big purposes that cannot be achieved in a small period of time.
• So the last but not least, you have some extra money so you want to save it.

How much to save?

At least 6 months expenditure.

Most financial experts end up suggesting you need cash equal to six months of expenses: If you need 3000 to survive every month, save 18000. It is because approximately, an eight-month emergency fund can help you to find a new job. It nearly takes 8 months, That's about how long it takes the average person to find a job.

So it is up to you when you save? and why do you save? how much do you save?

The only matter is how do you save?

I will try to convey this in another way, if you plant a small tree, after some time it will start flowering and you will get a flower from that. And after years it will start to grow bigger but if you get the same amount of flowers when it was small.

Do you worry about that or not? Yes, you do because it was small so it was giving that much or small amount of flowers so you don't bother then, now it is big so it has the potential to provide many flowers.

In the same way, you have a small amount and save it in hard cash it will be there but I will never grow like a tree. To grow it like it tree you need to convert that cash into other forms so that it will start growing itself.

even if you have a bank account and you add that amount to your account, a bank may have some strategy to provide interest on your money on that bank account so they will provide some interest to that yearly so the bank will help to money to grow in a little way.

It is a safe thing if you have a bank account because it is easy and secure, you are directly connected to the bank. Bank will help others by proving loans. and also it is far better than growing from nothing to growing with something or even a 1%.

So in the early days, people used to save money in the form of fixed deposits (FD). They also get a fixed interest for it, for a reason and they will get a higher return when their time period is over.

So think it is just like an investment, you provide or save it and it will grow and you will often get a return from it.

So your savings can be like this or you even do better if you make your savings in terms of other than in hard cash.

If you are still not getting it, just think about the loan (a thing that is borrowed, especially a sum of money that is expected to be paid back with interest.). They do charge some percentage of interest over a time period.

Disclaimer

Like all securities, mutual funds are subject to market, or systematic, risk, investments are subject to market risks, read all scheme related documents carefully. Investors are requested to review the prospectus carefully and obtain expert professional advice about specific legal, tax, and financial implications of the investment/participation in the scheme.