The Covid-19 pandemic has taught us the importance of savings. Losing jobs, facing pay cuts, and emergency spending on health have generated a sense of financial insecurity, even among the well-off.
Among the commoners, the importance of money management and savings has never been felt so strongly in recent past decades.
The consequence of the Covid-19 pandemic is yet to end fully. The impact of the pandemic still persists and people are struggling to come out of the crisis. In addition, the ongoing economic crisis caused by the Russia-Ukraine war expedited the necessity of good management of your income and keeping aside a portion to save for rainy days.
Losing jobs or high spending to recover from the Covid-19 related expenses and coping with the high inflation forced people to spend their savings, some of them even resorted to borrowing.
Those who had savings were able to absorb the shocks, others could not.
The Covid-19 pandemic has been a wake-up call for both those who had savings and had not. Will we forget the lesson or remain reluctant to respond to the call?
It can be assumed that most of us would respond positively. But there is another important question; do people have enough income or disposable funds to save? Here is the complexity…. but there is a solution too.
“Do not save what is left after spending, but spend what is left after saving,” said Warren Buffett, an American business magnate.
It may seem odd to motivate someone to save when people are struggling to make ends meet amid the global economic crisis and rising inflation.
But putting money away for the future is a priority and a must. Considering the present economic crisis, it is the best time to start saving to ensure protection against the odd situation as well as better retirement. All of us now know how crucial savings are for meeting unprecedented needs and avoiding such mistakes in the future.
Starting or sticking to a savings plan is something you will never regret. Here are a few reasons why you need to be habituated to savings and investing.
Tackling emergency needs
Saving is a protection against unexpected income drops, job cuts, or emergency spending. It works as a financial cushion for food security, housing stability, medical care, and other needs of daily life.
“We don’t know about future challenges or the urgency of money, but can remain alert and well prepared to avert untoward shocks,” Zahid Hossain, former lead economist of the World Bank, Dhaka office, told The Business Post.
Today’s savings will give you a safeguard against emergency needs tomorrow, said the economist.
He advised choosing an institution for savings with a strong financial base as well as compliance.
On the other hand, having deposits with insurance covering health expenses can provide a wall against emergency and untoward medical costs.
For better retirement
For those who want to secure a comfortable retirement, must have savings with secured financial institutions.
“As there is no government universal pension scheme still in Bangladesh, ensuring a safe retirement life with travelling across the world, one can plan a saving scheme available in the market,” said Ahsan H Mansur, executive director of the Policy Research Institute (PRI).
Saving for retirement often takes place within a special retirement scheme. And while selecting the institutions, one must choose to be compliant, the economist suggested.
Education for children
You cannot neglect saving money for education, whether it’s for yourself or your children. The burden of education expenses becomes heavy when you also get older and the number of children increases. To keep your pressure on education expenses slower, you need to save money. There are several schemes in banks and insurance companies focusing on education.
On top of that, school banking has brought a great opportunity to save for the future.
“Everyone has to have savings to face untoward and emergency financial challenges such as medical cost higher education cost of children and secured retirement,” Khurshed Alam, senior executive vice president and head of retail financial services of LankaBangla Finance, told The Business Post.
“In catering to people’s needs, we are offering different types of saving schemes such as Swasti Secured Money Builder and Protiva Secured Money Builder, two of our popular schemes,” said Khurshed.
Protiva Secured Money Builder is backed by insurance and in case of any untoward incident, the nominee of the depositors will get the full amount, he added.
Save for a vacation
People usually like to travel or enjoy vacations, when there are disposable funds in their hands.
But it is quite difficult to bear the expenses of a tour with the regular salaries but small monthly savings can give a big amount to enjoy holidays with family members. n
