Is it wise to put the money in a piggy bank or keep it safe inside the cupboard?

As a mom, you have to do is deposit small amounts from time to time.

Moms who take up the task of running their family on a budget actually have a pretty difficult job to do. A family means having kids, raising the kids, being able to provide them a good education, keeping the finances straight and a lot more other things; and moms take up these challenges quite well.

A mom is like the neck of the family – yes, even the head (of the family) turns under the guidance of the neck! But the question is whether moms are saving the money in the right ways or not. The quintessential mom tries to save money little by little, mostly in their piggy bank, but that money does not yield any return. So now is the time when moms should start thinking smartly.

Is it wise to put the money in a piggy bank or keep it safe inside the cupboard?

Well, when a mom decides to invest the amount she is saving, she will think about the welfare of the entire family. And the best thing is that there are numerous investment options that she can opt for. Starting from long term mutual funds, short term debt funds and fixed deposits, to life insurance and a lot more.

These options are way smarter than stocking the amount under lock and key where there is no scope of getting any returns on saving.

Invest in mutual funds that support SIP

Moms can save money from groceries, from travel expenses, and many other ways. Now, what if this money could be put somewhere such that they could get a larger amount in return?

That is perhaps the smartest way to save money and make it grow. And the first option that naturally comes to the mind is buying mutual funds; to be precise, mutual funds that support systematic investment planning (SIP). This way the money will grow, and all that you, as a mom, have to do is deposit small amounts from time to time.

Now the thought of mutual funds and investments, of course, entail a whole lot of other complexities and parameters like market conditions, the type of mutual fund you are investing in and others, which might make you feel skeptical about investments. But if you get in touch with a reliable and expert financial advisor or mutual fund distributor, you will find effective guidance on this matter. Seeking professional help will not only help you make the most of your savings but also straighten out the complications for you. And you can enjoy handsome returns on your investments, which would never be possible by just keeping money aside in your piggy bank.

You can consider buying term life insurance

For stay-at-home moms, buying life insurance is a great way of augmenting income from saved money. If you buy life insurance with the money that you have saved you will not only protect your family from emergencies but also ensure financial stability for your near and dear ones after you are gone.

A term life insurance scheme offers substantial financial benefits to beneficiaries in case of the early demise of the policyholder. And suppose the life insurance term is completed and you are still alive, you will still receive a fair amount of bonus on the entire amount that you had invested in.

Short-term debt funds are also worth checking out

You can also invest in short term debt funds which are basically mutual fund schemes with tenure of three to four years. If you are looking for something really safe then this is perfect for you because from these you will be able to get modest returns but the risk associated with these are pretty less since you are a mom who needs to plan wisely this investment option can be very convenient for you.

Now for your better understanding, we will discuss the merits and demerits of saving money in a piggy bank or cupboard.

Piggy Bank savings – benefits and drawbacks

Saving in your piggy bank, or keeping aside money in the cupboard from daily expenses is one of the most dated methods of saving for a rainy day. Possibly the only convenience of saving money in the cupboard is that you can save it at your own pace and as little as you want to; not to mention that it involves no number crunching or complexities as such.

One big concern about relying on a piggybank is security. If you happen to misplace the money, or your piggy bank gets stolen or broken, you will lose the entire amount! This is highly risky and this part cannot be ignored at any cost. Moreover, you will accrue no interest on the amount saved in the piggy bank, so you will not be able to enjoy greater returns on your savings.

What makes mutual funds better?

Saving money in the piggy bank has less relevance in today’s world when there are much smarter ways to grow the money and use it to your benefit. And these methods are low-risk and sturdy, as well as hugely popular – like mutual funds.

Piggy Banks Mutual Funds
Money saved does not grow exponentially – it is not an interest-accumulating system of investment Mutual funds can provide excellent returns on investment. Based on market conditions, the principal amount (your original investing amount) can yield much higher returns
Piggy banks cannot be considered as a source of income for a family – it does not grow your wealth to become a worthy income option Mutual funds like SIPs can well be treated as income replacements, and these are especially great because it beats market inflation
Unsafe, can be broken or misplaced or stolen Highly safe investment option – protects your assets and adds gains to them simultaneously
Remains unaffected by market inflation rates – so money accumulated diminishes in value after years Returns from mutual fund investments are inflation-adjusted as per prevalent market trends

Final words

When you know how to save smartly and grow your wealth, you can not only live better financially but also provide the best for your family.

So, why not start from today itself!

That’s why Comparte Investment team asks do you have “Nivesh Ki Aadat”.

With this one can say “Mutual Fund Sahi hai”,  so let me do Nivesh / Enquire

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