September 2, 2011

Why People do not Save/Invest Money in Saving Accounts and Why the Number of Savings Reduce in Banks Today?


There are various reasons why people find it hard to save, typically a certain family would settle into their income and divide if for food, children’s needs in school, electricity bills, clothing, miscellaneous bills etc. and some would be spent on unnecessary things that has not been included in their budget then some portion of it if there is any that is left would go to the bank but most of the time only a portion of it would be left. In other word bank savings is not a priority because there is so much to spend and nothing is left to be saved.

This has been the typical situation in most of the family, even there are times that they have the opportunity to save, people find it tempting to overspend to the things that they ever had in their life. Most people find it delighting to engage in overspending if they have gain a large amount of money in their salary and in their business especially during their first few years of earnings. But there are people who have experienced hardship in life who would engage in business or in a piggy bank but not in a savings bank and it’s OK.

The most difficult people is the one who spend their money on vices or things that are not important and find it easy to spend for their personal luxury or extravagance like smoking, drinking, gambling, party all night or even drugs and things like this that do not just eat up their money but rather their body and later on realized that they have spent their money on useless things that are simply material and nothing more. But the real effects is if they lost their money and find themselves in poverty and helplessness and their body is perishing in sickness but cannot be cured because they have not saved in a bank neither in a relationship but mostly on worthless expenses. Sometime even the savings given by their parents especially among the youth is lost due to worthless expenses that they have incurred. Spending more than what they have saved is the real reason that some people can experience poverty.

There are also people who defer their savings because they believe that they are going to earn today and tomorrow because of their job and business so they find it easy to feel that there is no need but rely on their income and their salary that has been the basis of their savings. Another reason is Peer pressure knowing that people around them have so much material possession that they are also involved to have things that they see. While even if it doesn’t necessarily mean that they need to get along their lifestyle even if it means losing the savings.

The rational thinking that they have a car, I need to have a better car! Is a definitely a wrong notion and a mental dilemma that will definitely lead a person in frustration and poverty in thinking rather than saving. And some would say that saving in bank is not for me, I want to live well today and I have the money. This has been the reasons why people found themselves in debt during their later part of life because they have not saved but mostly spent their earnings.

While it is true that people may not be able to save because of their financial constraint and obviously that we have suffering worldwide about economic depression and downturn in business that a low income and middle income family may not be able to save because of their basic needs. But if people could only learn how to plan and learn to prioritize more on their needs rather than they wants, the probability is they can save more.

Lesson from Bill Gates; Get a notebook and a pen on your pocket every time, all the time. Take time to record your budget including your salary and other sources of income, take time also to record all but all your expenses no matter how little even a candy and do it in a month. Now take a look at your expenses and try to cross out the things that are not important and learn to not to spend on those things like beer, junk food, cigarette, party, cable television, etc. can you eliminate on those things?.

You may have an idea on how much you can save in a week or month and you will realize just how much you have saved and later on you can put something in your bank account. I hope you take time to learn to do this practice and you can see a big difference in your life. According to Bill Gates, “the wealth comes at a time when you start to spend less than earn”. He had made his fortune in his windows software business but he started in savings that makes him rich and famous from retained earnings.

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