Saving money for the future is one of our priorities. We save money to secure our life after retirement and prepare for unforeseen expenses. Further, people want their savings for emergency services in the future, like medical purposes too.
Therefore, managing money becomes a vital part of our financial plan. However, is saving money for the future in a savings account enough? Sadly, the answer is no. Inflation and taxes can impact our savings in all kinds of ways. Therefore, saving money without proper planning is not reasonable anymore.
It is necessary to understand your finances and take the help of a financial adviser to protect your wealth as much as possible. Start with understanding how Inflation and taxes can impact your savings to meet your monetary aims and objectives.
When it comes to our cost of living in India, rising Inflation means goods and services are becoming more expensive than our previous lifestyle. In simple words, Inflation is when the average prices in the country go up. When it does, the amount you have saved for years now will fetch you lesser items than before. For example, according to the current inflation rate, if chocolate used to cost you 2 rupees, you might need to buy it for 20 rupees today.
Now, the question is, how does it affect your money management and day-to-day living? Well, the answer is, if your income hasn't increased along with the rate of Inflation, your buying power will fall. Why? Unfortunately, the amount you have saved from your income all month may not rise at the same rate. However, with Inflation, the costs of goods will have doubled over that time, putting extra pressure on your savings and investments.
Further, tax too confiscates a portion of your earnings. High-interest rates can impose a higher burden on income that you saved, reducing your ability to save for the future. Fortunately, there is always a way of saving money. Check out below.
To overcome the adverse effects of Inflation, you need to be alert while developing a plan for saving money for the future. Here are a few ideas to give you a head start.
All these above investments will grow your savings the way you desire and give you ultimate protection against Inflation.
Lastly, people today know how to earn money but saving money for the future is easier said than done. OAWA is an online institute that offers courses designed for a deep understanding of wealth management. Therefore, why wait? Enroll now, learn all about saving money from experts.
Why is savings not enough?
Savings accounts have Low-Interest rates and cannot beat Inflation. Therefore, savings can go to waste without money management and robust financial planning.
What to do with savings?
You can save money for retirement, college education for kids, medical emergencies, etc.
Where to invest as a beginner?
For risk-free investment, you can invest in Public Provident Fund (PPF), Bank fixed deposit (FD), or Senior Citizens' Saving Scheme (SCSS) for high returns.