Need for Savings

For socio-economic development, we must have a true and fair idea about the quantum of saving and investment, the behavior of people towards saving and investment and the method by which saving can be improved for investment decisions.

In the formation of physical assets in every economy, household saving is of utmost importance. The households undertake a substantial portion of the physical investment directly and they also make public and private corporate investment possible by the transfer of saving. The implication is that the household saving behavior determines to a large extent whether or not investment targets have been achieved. Hence, the volume of saving of the household sector and the form in which it is held is of crucial importance, as consumption reflects the efficiency of investment of saving.

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Lola Fadesola

“My life changed when I set a goal at the beginning of a period and I worked towards it. Not only did it drive a more diligent work ethic, I was also more disciplined as I was focused on meeting my savings goal as against impressing my friends and buying the next owambe aso-ebi. I discovered I was happier because I felt more in control and happier and my confidence increased significantly.”

Savings is important to create a cushion against an emergency.

Having a store of ‘rainy day money’ can increase an individual or a family’s resilience and enable it to cope with better and unexpected shocks.

In addition, storing up assets could increase opportunities, it provides the funds for families to support children when they go to university or to pay for training. People who are “planners” and do future-oriented things such as setting goals and taking steps (e.g., saving money) to achieve those goals feel happier, and better about their lives like Lola than those who don’t make plans.