Why saving matters to you - and the economy

Fin24
2014-07-25 07:45
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Johannesburg - Did you know that saving not only benefits you as the person who now has enough money for that long-awaited holiday or schoool fees for the kids, but also the economy as a whole?

FNB head of market analytics at Savings and Investments, Doret Jooste, shed some light on the role that savings play in the economy during an interview with Fin24.

"We all know that saving is important because it enables us to reach our financial goals," she said.

Jooste pointed out that savings also play a crucial role in the economy, because they can fuel economic growth.

So how does this work?

"Let's say you deposit your money at a bank. You earn interest on (those) funds, which helps you to grow your money, and also enables you to reach your financial goals.

"The bank on the other hand uses your funds - and funds of other depositors - to lend money to borrowers," Jooste explained.

Those borrowers, said Jooste, can be either individuals or businesses who now use these funds in different ways, such as starting a business, paying for studies or expanding a business.

This in turn, said Jooste, holds a number of benefits for issues like job-creation, developing infrastructure and improving skills.

"So we see that saving not only benefits savers, but it also has spillover effects that benefit our economy and society."

Watch the interview for savings tips:


 
 - Fin24

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