Desperate times require even more desperate savings habits. But the reverse is the case for the majority worldwide.
The culture of saving is as old as the history of economics and finance itself. Despite being entrenched deeply into the fabric of money management, its importance continues to elude many. Data from Statista in 2021 revealed that less than half of American adults would borrow money to settle a financial emergency.
Deteriorating Savings Culture
More recent statistics from Bankrate indicate that this situation may have worsened over time. American Gen Zs expressed the most fear when asked to quantify their confidence in their savings.
Source: Bankrate
Almost 70% were uncomfortable about their emergency stash, while only 32% were happy. About 63% of millennials expressed dissatisfaction with their savings leaving 37% who felt otherwise. Across board, the younger population was the most dissatisfied with their savings.
Reports from local sources showed that developing countries like Nigeria bore a significant contrast from the Europeans. In 2021 the number of adults who saved money in financial institutions reduced from 23.6% in the previous year to 17.7%. This population was the lowest in 10 years. However, other neighbouring African countries like South Africa and Namibia recorded significantly higher numbers leaving its most populous nation behind.
What’s An Automatic Savings And Investment Plan?
An automatic savings or investment plan is a structure that automates the process of depositing funds from an existing account regularly. The plan allows account holders to specify dates, frequency and amounts to be deducted from the salary account and deposited into another. You must always ensure the minimum required amount is available before the deduction date.
For many, savings usually take a back seat to bill settlement and expenditures, leaving the salary reserve drained before month’s end. Meanwhile, inflation and economic uncertainties continue to stretch the limits of many citizens, especially in developing countries. Hence, it became more crucial to lock away savings before tackling the ever-increasing aggressive bills. This challenge heightens the need for automatic savings investment plans. This article sheds more insight on actionable steps to create an automatic savings/investment account.
Do you think automating a savings account will help you save more or not? Let us know your answer in the comment section below.
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