SAVE MONEY

Recently I heard from a financial consultant in Abu Dhabi that only 3% of the global population is saving money for their retired life. Almost half of the global population lives under the poverty line which means only 6% of the people who are above the poverty line in the world are in the habit of saving for the future.

Earning money is very difficult and spending money is very easy. Saving money is crucial for our own well being as we need to conserve our financial resources to meet future eventualities. Retired life is the time period of our existence in the world when we will not have the regular source of income from our Profession or Vocation. It is important to have savings from the young age so that we will have sufficient resources to meet our own expenses when we are old.

There is a powerful line in a tamil film song which I like very much "sertha panatha sikkanama selavu seyya packuvama amma kayile kuduthu podu chinna kannu avunga aara nooru aakuvanga chella kannu". Give your earnings to you mother (or wife) she will spend carefully and save in order to multiply six into hundred.

Youngsters are very fond of branded goods, holidays, entertainment and end up having a flashy lifestyle. They end up spending all the money that they earn. I have seen in some cases that they end up spending much more than what they earn as they get into a debt trap. Credit Card is a dangerous resource if it is not used properly. It is nice and gives a great pleasure when we spend money but we have to be cautious in ensuring that there is no over-spend.

I have practiced the savings habit right through my career and always believed in the Daily Savings and Monthly Savings Schemes (Pigmy Deposit or Recurring Deposit Scheme). If you keep aside a fixed amount on a monthly basis as part of your monthly expenditure it would come in handy when the Recurring Deposit Account matures at the end of the term. I have practiced the Recurring Deposit and I have also advised it to my clients and friends over the last three decades.

There is misconception on account of which people who are cautious with their spending and are having a habit of saving are mistaken to be stingy. You need to spend money on essentials and what is needed for the day to day living. You also need to spend money on leisure and entertainment but at the same time a part of the earnings should also be set aside for savings.

Saving money can be done through bank deposits (Recurring Deposit or Fixed Deposit Schemes); shares; gold coins; etc. Irrespective of the form of the savings the underlying purpose should be (a) protection of the capital and (b) earning a reasonable and decent return on the investments. It is important for everyone to have savings as a source of protection for future.

T.P.Anand
Dubai, U.A.E.
30th March 2012