Here is a Tips to Invest Your Saving for your better future

Splitting up your savings will ensure that you have adequately covered all aspects of your financial well-being.

You cannot become wealthy by just saving, but it is necessary to invest with savings.

A Smart & Simple Tips to Manage Your Finances: Pankaj Bhai Katarmal, 43, living in Jamnagar, Gujarat, is a shopkeeper, who saves Rs 10,000 to 12,000 every month. Due to lack of knowledge about where and how to invest his savings money, all the savings of Pankajbhai are lying either in the form of cash at home or in the savings account. There are many people like him who save some money every month, but do not invest. If the saved money remains like this, then its value is actually less, because the inflation rate is increasing by 5-6 percent and only 3-4 percent interest is available in the bank savings account.

If you feel that you have saved a decent amount for savings, then it has to be used wisely. Because saving is a very important thing which is directly related to your continued and future financial well being. Splitting up your savings will ensure that you have adequately covered all aspects of your financial well-being.


First of all, a part of your savings will have to be spent for insurance. Insurance is very important. Ideally, if you are saving more than 20-30% of your income and out of that the insurance premium is more than 30% (of the savings), then perhaps your choice of insurance policies needs to be looked at closely and the insurance premium needs to be reduced.
Traditional life insurance plans (like Endowment/Money-back/Return of Premium + Bonus Plan, etc.) offer very little benefit in terms of cover/sum insured and you have to pay a high premium for these. That is, you have to pay a very heavy cost of diminishing returns on the hefty premiums you pay. First of all, one should get exemption from such expensive insurance. A good insurance portfolio should consist of pure term plan + health cover + personal accident cover + critical illness cover.

long term investment

The more money you save, the better the benefits will be for your life’s long term goals like getting kids married, buying a house, and most importantly – planning for your retirement. For this you should invest the most part of your savings. Ideally, you should aim to save at least 20% of your income and invest more than 60% of the amount saved for the long-term.

short term investment

For this you should keep some money with you. For this, you can keep some money with you in the form of cash or in a savings bank account, in the form of bank FD. It can also be used for emergency fund. This should also include the money you want to set aside for upcoming big expenses like purchase of electronics/holidays/festivals/family events.

Never use your long term savings to meet such expenses. Plan for such expenses in advance and save some portion in the months before the expenditure. This helps you do two things – by reducing the power of compounding benefits that accrue from your long-term investments and availing loans/credits. Ideally, 10-20% of your savings can be allocated for this.

With the above tips, you can plan your finances very easily. The most important thing is to really start, do it consistently for a few months, develop the habit of ‘budgeting’ and then move on to detailed plans as and when required. Doing so will definitely help you understand your situation and also make it easier for you to set goals in the coming months.

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