The purpose of earning in a person’s life is to save as well as fulfil all the objectives. Therefore, the earlier you start saving, the better it is. In fact, most financial experts recommend having a fixed amount of savings starting from the day you receive your first salary. Once you start this practice, you can, later on, increase the amount with an increment in your salary. However, consistency is the key in terms of savings. Therefore, cultivating the habit of savings from the very beginning would help you secure your financial future.
However, seeing the situation of price rise, merely starting saving with your first salary may not help you in today’s day and age. Investing your savings in a savings plan or guaranteed savings plan would help you multiply your savings.
Let us now understand the importance of purchasing a savings plan with your first salary.
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7 Reasons to Buy a Savings Plan With Your First Salary
Here are the 7 reasons to purchase a savings plan with your first salary:
As we all know that the future is uncertain, and financial emergencies may emerge at any time. In your worst financial condition, your savings can be of great help in situations like paying a large hospital bill, avoiding debt, etc. Therefore, it is advisable to maintain a contingency fund so that it can be liquidated immediately during a financial crisis. A monthly savings plan will help you accumulate the emergency fund easily.
Only keeping aside a fixed amount every month without a due date is difficult for most people. However, when you purchase a savings plan, financial discipline will automatically follow. This is because one of the benefits of a savings plan is that it helps you build financial discipline as well as reduce unnecessary spending.
In case of an untimely death, an insurance savings plan will come to the rescue. A life insurance cover is usually a part of a regular savings investment plan. Hence it acts as coverage for your family in case of uncertainties. This also works as a financial legacy to secure your family even if you are not with them.
Regular savings plans help you avail of a tax deduction under section 80C of the Income Tax (IT) Act up to a limit of ₹1.5 lakh for the premium payments made. Not only this, but you can also get an exemption from the maturity benefit amount under Section 10(10D) of the same IT Act.
You usually have different options available while choosing a savings plan. It means that you can choose it as per your requirements, future goals, and type of funds. For example, while choosing the type of fund, you can pick a plan that allows you to increase the premium after a certain period or a regular income plan. The only thing that you need to be careful of is choosing a plan that is flexible enough to meet all your requirements.
Customisation is a key feature that helps you achieve the financial goals of a savings plan. For example, Tata AIA term insurance provides a savings plan through which you can accomplish your financial objectives, be it short-term or long-term. Moreover, opting for such plans provides security to your family besides fulfilling your dreams and handling the liabilities that come your way.
There are very few young people who can actually save their money in a systematic manner despite knowing its benefits. However, if you get a savings plan early in your career, especially with your first salary, it helps you to invest systematically and earn significant returns.
Now that you are well aware of the benefits of a savings plan, you know that it is preferable to buy a savings plan from your first salary. But, there are numerous insurance providers in the market that offer various types of savings plans. It is usually difficult to select one from such a large pool. However, there are some parameters even for an insurance provider, such as claim settlement ratio, their credibility in the market, etc., that help you decide on a suitable insurance provider.