Our society’s debt level is still rising. Even if new social programs appear, they are often “overeated”, which of course affects high consumption. There are still few people with relatively high savings, although their percentage is slowly growing. Although this phenomenon is unfavorable for the economy, it continues to exist. So how do you reconcile saving with taking more loans?
The devil (apparently) is not scary!
The phenomenon referred to in the introduction to this article is not, in truth, anything new in our society. Poles’ incomes are rising too slowly to speak of some kind of revolution here. Even government social programs in the form of 500 + and 300 + did not “settle” the matter, because many people gave up real employment in favor of staying on the “pot” of the state budget. Even if someone decided to postpone additional funds for the future, it is still likely that they will soon be transferred to the implementation of large investments and even to finance the current (growing) needs of the household.
Credit or deposit?
And here comes the crux of the described problem. What better to pay back your current investment – a loan that (let’s face it) costs, or a deposit for which you get residual capital? The answer is simple: credit, because this option is much more beneficial for us and – generally speaking – for the entire economy. Why?
The loan is broken down into many small installments. Of course, their incurring is burdened with quite high costs, but they are divided into many installments, which repayment time reaches even 5 years. In such a large time interval, the costs incurred due to the loan, balanced by capital gains, are indeed relatively small and will certainly not be burdensome for the household.
Owning capital is not a privilege but an obligation. Even paying your bills monthly is always a risk. It is precisely the capital that minimizes them, which can be used to pay liabilities, settle bills, and even to supply your household budget for several months.
Deposits and savings accounts are a safe capital for the future. You never know what economic or financial turmoil will affect us or our society. Of course, during the macro crisis, even big savings will not help, but – if it is not so bothersome – they will help you through difficult times.
Is it still worth saving?
Many people might argue that maintaining your own savings is simply not profitable. The fact is that from an economic point of view this thesis turns out to be fully justified. The residual interest rate that balances on the inflation line will not bring us tangible profits on which we could actually get rich. In the economy, investments and savings are interrelated. If the latter lack, everyone – from the household to the global economy – will risk a lack of liquidity. From here, only a few steps to the global recession.
To sum up, cash loans are a much more profitable way of financing investments than funds from deposits. And this is obviously not about economics, but above all about common sense. In economics, money should not always rule. We have already seen this during previous economic crises. We all know their economic and social consequences.