Family Economics and Consumer Education

Family Economics And Consumer Education 3 (2+1)

Lesson 09 : Planning for Family Financial Security-Savings and Investments

Advantages Of savings

Savings have various advantages for the family viz,

1. Savings induct financial confidence in the family. They enable the individuals and the family to face the future with a sense of security.
2. Savings bring about a balance between income and expenditure of a family. Hence savings provide a feeling of comfort and financial certainty.
3. Savings remove inequalities of income and monetary resources during different stages of family life cycle. The ups and downs during the family life cycle are evened out by savings made regularly.
4. Savings enable to develop a systematic layout for spending money. Money management decisions are made smooth if one has savings plan in mind.
5. Accumulation of money for various purposes through savings is possible such as investment in business, purchase of property etc.
6. Savings help in facing unforeseen emergencies and contingencies.
7. Savings are useful in maintaining a better standard of living with such assets like automobiles etc.
8. Savings provide prestige value to the family in the society. It enhances socioeconomic status.
9. Savings enable to face inequalities posed by business cycles like deflation, inflation etc.
10. Savings of people and channelized financial institutions promote investment and economic growth of a country.
11. Helpful in securing loans.
12. Useful for children’s education, marriages or other family expenditure.
13. Becomes a source of income.
14. It is a good habit.