Savings or loans? What do people prefer more?

The common men tend to save more rather than investing. We are scared to spend our savings because we are not sure that there will be ROI ( Return of Investment) or not.

Saving gives you freedom, but that takes hard long years to save money.

Not only we have to cut down our desire to spend, but also we have to avoid temptation. It took a lot of trouble to save little money, especially when you are not earning well.

With the inflation and rising cost of living, it is becoming difficult for the common man to fulfill their day to day daily needs. Be it petrol or be it grocery, the increased cost of all the basic needs is creating trouble for the common man.

Sometimes, we save for the future and prepare ourselves for upcoming expenses. We usually save for fixed expenses like the education of children and the marriage of a daughter. And if you are free from these expenses, then definitely like to save for retirement, for our old age.

Also, there are emergencies and unexpected expenses, for which we should save money.

Saving money always allows you to enjoy greater security in life.

Also saving and investing are equally important. Saving allows you lower risk with the lower return, but in investment, there is no guarantee you would get your principal amount or not.

Suppose we see the current era of the pandemic. COVID 19 has adversely affected our day to day life. Thousand of poor people’s livelihood has already collapsed with the emergence of Corona.

Corona has brought the darkness of uncertainty of life along with the uncertainty of money.

We all are eagerly waiting to end the corona era by getting vaccinated. The year 2020 is about to end, but there is no concrete update by when the vaccine would come.

There is an old saying “Our health is our wealth”. It is also one primary reason people are more focused on savings currently so that can bear any unexpected expenses related to their health. We all like to get assured that we are healthy and safe so that all are saving does not get ruined in hefty hospital expenses.

The lockdown has brought recession across the globe. Some sectors like hospitality, aviation, tourism, transport, holiday operator, Cinema owners have mostly lost their business. All the working class and salaried persons associated with these industries have lost their jobs.

According to the Hindu ( 7 May 2020), 122 million people in India lost their jobs in April 2020 at the time of the lockdown. More than 75% are those who are wage labourers and small traders.

After lockdown ends, small traders have resumed their job, but the one who is still struggling for the bread and butter is a salaried person.

We will find that currently, a lesser number of people are showing interest in investing money. People are not financially secured. They are not confident of the next move in their job/ business. Will they able to spend in the same way they were spending earlier?

Many leading banks are offering loans at a very nominal interest rate, be it a personal loan or any other form of loans such as a home loan or a car loan.

According to Financial Express, credit growth is nearly half the level of last year. But deposits are growing at a higher pace than last year. Last year the Deposits were 10 % but amidst of Corona people are focusing more in savings and this year’s deposit has reached 12%.

The current trends in bank deposits indicate that people are spending less and focusing more on fund saving.

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