Lesson 09 : Planning for Family Financial Security-Savings and Investments
Concept Of Savings
Savings refer to the difference between income and expenditure for consumption. That part of individuals income maintained after his or his family’s expenditure on consumption is saving. This part of money which is saved is used for future needs and requirements. Suppose an individual’s monthly income is Rs.5000 and he spends Rs.4000 for his or his family’s consumption needs the remaining amount of Rs.1000 is his savings per month. Therefore Savings = Income –Consumption or S = I-C avings of an individual depends upon the size of his income. If his income is high his savings will be more and vice versa.
Need For Saving/ Reasons for savings The desire for security is an important motivating force in the lives of the people. One of the effective ways to build financial security is to develop savings plan. There should be permanent column of savings in the family’s spending plan or budget.
Participants