Editing Content :: Admin Scraper

Chapter

Content type

Position

Value

Human Ecology and Family Sciences Savings means keeping aside a part of your money or other resource for use in future or for further production. Savings are important for a family to take care of their future needs. Savings are also important for any economy to survive and grow as savings lead to capital formation and accumulation. This happens when savings are put to productive use by starting a business or depositing money in banks and financial institutions which mobilise public savings and use them for productive use. Savings of a family depend on the ability to save and willingness to save. Ability to save depends on per capita income. Higher income families have a higher potential to save compared to low income families who have little to save after taking care of their basic needs. Willingness to save depends upon the long term goals of the family and how willing they may be to sacrifice some luxuries in the present to take care of the future. Saving money is not easy. It takes discipline, planning, co–operation and hard work on the part of family members. But saving money is very important for family security and happiness. Saving for saving’s sake is futile. Savings have meaning only when the purpose is well-planned and understood by all family members and the money wisely invested for future use. 10.7 Investment 196 Investment implies using the money for further production. If savings are put under the folds of a saree or kept hidden in a pitcher, it is not going to result in investment. Savings have to be put to productive use in the economic sense to result in investment. Investments may be in two types of assets – physical assets and financial assets. Savings, if put into bank accounts, post offices, or financial credit societies institution, in shares and securities, insurance policies, etc., lead to formation of financial assets. They provide financial security to the family and are productive in economic terms. Savings in physical assets means using your savings to buy land, property,house,gold,householddurables,etc.Thiskindofinvestmentisnot productive in the economic sense of the term and does not result in capital formation. However, it usually has long term positive returns. A ctivity 5 Identify the various avenues of savings Principles underlying and investments that your family is making sound investments use of. Families spend a lifetime accumulating savings. These savings must be invested wisely to give the family good returns and ensure that the money is safe and available to them when they need it. Let us now discuss the principles underlying sound investments. (i) Safety of the principal amount: The principal itself has to be safe if it is to earn interest or dividends. This principal is the most important Reprint 2026-27