This is purely for Indian based market and people residing in India:
Let us assume you save Rs1000 per month.I would invest 60% and keep 40% in my account.
a)Investments:
1)PPF account-15 years plan
-The earlier you start the best for you
-Try to plan per yearly how much you want to dedicate to PPF based on your salary.For example if I target Rs 100/year.Try to divide it by 12(no of months) i.e Rs 8.33 and add an auto debit of Rs 8.33 to your PPF account
-Try to transfer the money you intend to before 5th of the month so as to gain the running month's interest
-Helpful in longer terms
-Add average money as the duration period is a long term one i.e 15 years
-Government is too lenient for PPF
-Interest rate 8.75% and amount one can add to there PPF account ranges from mere Rs 500 to 1.5 lakhs(recently increased)
2)SIP(MF):2-5 years gives best outcome for midcap and 10-12 years for long cap
-Personally for me I go for mid cap investments
-Try 2 mid cap and 1 large cap investment(if you can afford)
-For details see here: Shambhavi Choudhary's answer to What are the differences between small-cap, mid-cap, and large-cap mutual funds in India?
-No tax benefits but great return
3)NSC: 5 years
-Buy National Saving certificates for the extra added income
-Example, if you target to buy 25k , the amount is almost double in five years
-Good tax benefits
4)Life Insurance Policy:16-25 years duration plan have best outcome
-An okay investment
-Good tax benefits
-Buy one when you can afford
-LIC Insurances are the best Example:Jeevan Anand
-SBI Life Money Back is also okay
5)Other optional investments:Do only when permissible
a)Rajiv Gandhi Equity Saving's scheme: really good one
b)ULIP
c)Post office Saving's bank A/C/Time Deposit scheme/MIS
d)Trade only if you know the art of trading otherwise highly risky
6)Last but not the least-FD and RD:
A)Fixed Deposits:(6 months-15 years)
When you get a bonus/any investment matures/a major chunk of money keep it in FD.Today, private banks like ICICI,HDFC etc has made it really transparent where you can open through netbanking itself.The minimum period is 6 months.They don't come under tax exemption but are a great asset.
B)Recurring Deposits:(6 months-15 years)
-One should make a rule of always having a recurring deposit in Life while you are earning.
-Merely starts from 500 Rs and the best middle duration (keeping best interest provided in mind) is 15 months
-Taxable
-Convert your RD total (once it matures) into FD if you really don't need that money
-Keep minimum 2 RD's
-Can be broken at any point of time
-Highly recommended
b)Savings in your Bank Account:
For me personally, they are really helpful in my time of need.
It is good to keep a good chunk of money in your saving's account which you can use in emergency.For example, as stated earlier if I target Rs 1000 as my savings per month I will add Rs 400(40%) to my savings bank account.
Some personal tips:
a)Open a savings account and link your salary account to it.Go for an auto debit
b)It is highly recommended that keep a Public sector bank as your saving's bank
c)Do not handle much of it in terms of Netbanking,mobile banking.Infact I don't carry the ATM also with me.This is a pschycological game I play with myself to save myself from being a spendthrift.If I carry the ATM , I shall know I have money and can spend more than reqd(human tendency nothing bad in it)
d)Interest earned on SB account is taxfree
BONUS: My 15 golden Suggestions on how to save money:
1)Calculate your tax much ahead for a financial year and plan your investments.Keep a record of all of them like date start , date end, rate% , amount paid and amount received.
2)Calculate your daily expenditures and if possible maintain a diary.When you see how much you spend you can identify what was your requirement and what was absolutely not
3)The Warren Buffet principle: Salary-savings=your expenditures and not Salary-expenditures=savings
4)Don't invest much on yourself for no reason.Personally I have seen people who spend major chunk of there salaries for fun every weekend.They are not worth it.Sometimes it is fine.
5)Buy PM JanDhan Yojna it hardly costs Rs 12
6)Target to save 35-40% of your salary
7)Compare all policies/rate of interest/any plans on policy bazar first.
8)If you are into private sector, go for NPS(National Pension Scheme) because we don't have govt jobs who can depend on pension.We youngsters hardly think about future
9)Keep track of your PF , through EPFO website/app
10)Credit cards are just means to fool you.Keep one if you really require.Once you possess, make sure you maintain it.Don't ever ever come in terms of EMIs.They are a real waste.
11)This will be enough saving, you can always go for buying home,property,car or anything of need once you know you are financially stable.Even though you have money, take a home loan because they help a lot in tax benefits.Some other regular tax benefit can include donations,Tution fees of your children,education loan etc
12)Try as much auto debit as you can for all investments and savings.Mentally you will know how much you have in your account and how much you need to spend.If not auto debit, maintain a chart and make transfers by 1/2nd of every month.
13)Dont compromise on quality life for savings
14)Respect in material world comes from money but Love comes from relations :) Plan the best for both money and Love from your relations
15)Extend your student kind of lifestyle until 2 years once you start your job.Trust me the amount you save during this time can do wonders.
HAPPY SAVING :)
Note: I have given all possible options, you may not able to fulfill all so prioritize on your own which may be different from person to person