What are Savings?
Savings, according to dictionary definition, are what a person has left over when the cost of his or her consumer expenditure is subtracted from the amount of disposable income earned in a given period of time. For those who are financially prudent, the amount of money left over after personal expenses have been met can be positive; for those who tend to rely on credit and loans to make ends meet, there is no money left for savings. Savings can be used to increase income through investing in different investment vehicles.
Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recurring costs.
SAVINGS PRINCIPLE IN THE BIBLE
- JOSEPH AND FAMINE: Gen 41:33-36 KJV 33 Now therefore let Pharaoh look out a man discreet and wise, and set him over the land of Egypt. 34 Let Pharaoh do this, and let him appoint officers over the land, and take up the fifth part of the land of Egypt in the seven plenteous years. 35 And let them gather all the food of those good years that come, and lay up corn under the hand of Pharaoh, and let them keep food in the cities. 36 And that food shall be for store to the land against the seven years of famine, which shall be in the land of Egypt; that the land perish not through the famine.
- LESSON FROM ANT: Pro 6:6-8 KJV 6 Go to the ant, thou sluggard; consider her ways, and be wise: 7 Which having no guide, overseer, or ruler, 8 Provideth her meat in the summer, and gathereth her food in the harvest.
- PAUL ADMONITION FOR FIRST DAY OF THE WEEK: 1Co 16:2 KJV Upon the first day of the week let every one of you lay by him in store, as God hath prospered him, that there be no gatherings when I come.
Savings comprise the amount of money left over after spending. For example, Sasha’s monthly paycheck is $5,000. Her expenses include a $1,300 rent payment, a $450 car payment, a $500 student loan payment, a $300 credit card payment, $250 for groceries, $75 for utilities, $75 for her cellphone and $100 for gas. Since her monthly income is $5,000 and her monthly expenses are $3,050, Sasha has $1,950 left over. If Sasha saves her excess income and faces an emergency, she has money to live on while resolving the issue. If Sasha does not save her extra money and her expenses exceed her income, she is living paycheck to paycheck. If she has an emergency, she does not have money to live on and must secure payments for her bills.
3 Types of Savings You Should Have Right Now
- Emergency: Emergency savings can provide a debt-free means to withstand financial shocks such as long-term illness, job loss, and unforeseen auto or home repairs.
- Retirement: Many people are ill-prepared for retirement because they either aren’t saving enough or aren’t saving at all
- Personal: Since retirement and emergency accounts are supposed to be off-limits, where do you get money to buy a new car, update your wardrobe, or go on vacation? From your personal savings.
Best Places to Put Your Savings- MONEY WORKING FOR YOU
Money that is considered savings is often put into an interest-earning account where the risk of losing your deposit is very low. Although you may be able to reap larger returns with higher-risk investments, such as stocks, the idea behind savings is to allow the money to grow slowly with little or no associated risk.
If you’re not earning any interest on your savings, your savings will be worth less over time due to inflation
There are a number of different types of accounts you can choose from for your savings. Compare rates before you open an account to ensure you maximize your savings
Money in a savings account typically cannot be withdrawn through check-writing and occasionally, not at an ATM. Interest rates for savings accounts are characteristically low;
Money Market Funds
A money market fund is a type of mutual fund that invests only in low-risk securities. As a result, money market funds are considered one of the lowest risk types of funds. Money market funds typically provide a return similar to short-term interest rates
Treasury Bills and Notes
Treasury notes are issued with maturities of 2, 3, 5, 7, and 10 years, and earn a fixed rate of interest every six months. In addition to interest, if purchased at a discount, T-notes can be cashed in for the face value at maturity. Both Treasury bills and notes are available at a minimum purchase of $100.
A bond is a low -risk debt investment, similar to an IOU, which is issued by companies, municipalities, states, and governments to fund projects. When you purchase a bond, you are lending money to one of these entities (known as the issuer). In exchange for the “loan,” the bond issuer pays interest for the life of the bond and returns the face value of the bond at maturity. Bonds are issued for a specific period at a fixed interest rate.
ADVANTAGE – The Bottom Line
Savings allow you to squirrel away money while earning modest, low-risk returns. Due to the large variety of savings vehicles, a little research can go a long way in determining which will work hardest for you. And, since interest rates are constantly changing, it is important to do your homework before committing your money to a particular savings account so you can make the most of your savings.
Why people don’t save
I don’t know where to save.
I don’t know how to save.
I can’t save.
I don’t have enough money to save.
Prices have gone up and now I can’t s
• Pay Off Your Debt
• If spending is a real weakness of yours, set up automatic deposits to help yourself live up to your savings commitments. You can either have your employer divvy up your paycheck between multiple accounts before you touch the money, or you can set up automatic deposits from a main bank account into your other accounts. Do whatever it takes to ensure your financial stability, even if it means resisting your temptations – no matter how much you think you deserve them
• Avoid impulse spending
• Make and stick to your budget
• USE KOLO OR PIGGY BOX
Are you saving like you should? If not, are you ready to make a change?
I have a book titled “HOW TO AVOID RECESSION IN LIFE” in which this principle is discussed in details. It is available for downloading at www.felixabodundeoutreach/store/mybooks