Money and I never got along well. I’ve never earned enough, and always depended on my parents for more. It’s not like I am after money, but I always wanted to save some, which I don’t see happening any time soon. For the sake of job satisfaction, I’ve started working for less money. But sometimes, I feel that job satisfaction alone is not enough for sustenance.
For one’s sustenance one needs money. I’ve given up on a lot of things in order to save money, but even then I am not able to save any. I avoid public transport and walk; I don’t eat out; I don’t splurge on entertainment. In short, I am not a spendthrift. Yet, it is difficult for me to make both ends meet.
In my childhood, my parents never gave me pocket money or any such allowance. They never taught me about savings. But my mom has been saving money in the post office against my name. Whenever I required money I just had to ask my parents for it and they gave it if they thought I needed. This way they kept an eye on me. I ended up telling them everything that I had been doing with the money they had given. Therefore, there were never any secrets between us.
I think on one hand, by not giving me any allowance helped me bond with my parents. On the other hand, no allowance meant no savings. I didn’t get to learn how to save as I always depended on my parents for money.
Recently, I attended a workshop on how to save money during the India Fellow midpoint training. What I learnt there was quite interesting. To save money, first we need to be friends with money. This could be done by opening a PPF account in which the rate of interest is high, savings are long term and it is tax free.
When compared to PPF, Mutual Funds have high rate of interest, due to which one gets riskier return. Hence, Mutual Funds are considered to be the second best option. Before even going for savings one needs to invest in life insurance. A money back policy insurance is not advisable. It provides life coverage during the term of the policy and the maturity benefits are paid in installments by way of survival benefits in every 5 years. In the event of death within the policy term, the death claim is made up of full sum assured without deducting any of the survival benefit amounts already paid. Therefore, one should never invest in a money back policy ; instead term insurance is better as it is the least expensive way to purchase a substantial death benefit on a coverage amount per premium rupees basis over a specific period of time. Stocks can multiply the amount of money one invests, but are very risky and no one (or atleast someone not a pro at it) can predict when the market would crash. Stock market is a gamble.
All it takes to save money, is a little planning. Now that I got to know more about investments, and the silly mistake that I’ve been committing by letting my money be in savings account, I think, I should now invest in a mutual fund or in PPF.