ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Saving money is one of the essential aspects of building wealth and having a secure financial future. Saving money gives you a way out of the uncertainties of life and provides you with an opportunity to enjoy a quality life.

Detailed explanation-2: -People save money for a variety of reasons as it provides financial security and freedom and also secures you in case any financial emergency arises. One can avoid debt, pay off loans, live their dream life and avoid further debt if they have saved a sufficient amount (which differs from each individual to other).

Detailed explanation-3: -Investing is an effective way to put your money to work and potentially build wealth. Smart investing may allow your money to outpace inflation and increase in value. The greater growth potential of investing is primarily due to the power of compounding and the risk-return tradeoff.

Detailed explanation-4: -How much should you save? While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependents, the rule of thumb is to put away at least three to six months’ worth of expenses.

Detailed explanation-5: -Set Your Goals Early On. Setting a financial goal early on will boost you to stick to your savings plan. Understand Your Cash Flows. Open a Savings Account. Rethink Debit Cards. Monitoring Your Spending. Revise Your Emergency Fund.