SAVINGS

SAVING:

Today’s income may be sufficient need’s but the future may bring increased need or decreased income or both. Only savings enables one to face the future demands bravely. savings is the result of thrift or economy exercised by the individual in his expenditure. So to say savings is the result of the wise spending plan of the individual.

Savings may be temporary or permanent. Temporary savings are designed to achieve immediate goals as purchasing a household equipment or going for a trip during vacation. Permanent savings are set aside for future security.

Reasons for savings

Fall in income during old age, sickness, unemployment, less pay or physical incapability.

Increased expenditure caused by illness, accidents, robbery or repairs.

To need to buy capital goods or assets like land, house, and durable goods as car, refrigerator and modern furniture and equipment.

For pleasure trips during holidays.

To celebrate functions and festivals.

To meet the demands of higher education.

To invest in business or firms.

To gain social status and economic security.

To provide for a secure life for the dependents.

It is helpful in producing wealth that will yield income at a later stage. Savings gives mental satisfaction and the capital to build up the nations progressive plans.