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Importance of savings Savings is the difference between Income and Expenditure. A high level of savings helps the economy to progress on a continuous growth path since investment is mainly financed out of savings. The habit of saving should be ingrained in man but there is more people nowadays squandering money than saving it. The habit of saving should be cultivated from young age so that a person should have firm resolve to set apart a certain amount for deposit in bank. A student who saves out of his pocket money learns to plan his life even from young age.
Liberal spending and saving nothing is unwise and this is the cause of person’s economic crisis sometimes. It may be suggested that every school should insist on the students that they should have a certain amount deposited in bank. The school management can help in inculcating the habit of saving in the students’. This will be a great social service schools can do. Savings can provide a great deal of financial security and even people on a budget and with debts to repay may be able to cut back on certain elements of their spending and put that money into savings.
It is very important to save early and save more because no one can control and predict interest rate fluctuations in the market. Starting to save early puts time on your side. Savings will add up quickly and funds can also start working in gaining the power of compound interest which will work in your favor. A person can earn on what he has saved and also earn on what he has already earned. Along with how much and how often you save , what you earn on your funds will determine how fats money grows.
It is again very important to consider different types of savings vehicles that provide different returns. Savings should not be kept idle at bank account. There is a long standing view on the growth process that increasing savings when transformed into productive investment would help achieve an economic to prosper. Savings contribute to higher investment and higher economic growth in the short time. The importance of savings in proving the fundamental growth impulses in the economy is one major factor for the progress of the country.
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