Question

Savings

Hint:

A core principle of personal finance is to {'Pay yourself first.'} This means treating your savings as a necessary expense that you set aside before you start spending on other things, rather than saving what is leftover.

Answer 1

Savings represent the portion of income that is not spent on current consumption. It is the money set aside for future use. Saving is a fundamental habit for achieving financial security.
Importance of Saving:
Emergency Fund: To cover unexpected expenses like medical bills or job loss.
Financial Goals: To accumulate money for specific goals, such as a down payment on a house or a child's education.
Retirement: To build a corpus to support oneself after stopping work.
Wealth Creation: Savings provide the capital for investments, which can grow and generate wealth over time.

Methods: Common methods include depositing money in savings accounts, fixed deposits (FDs), recurring deposits (RDs), and contributing to provident funds.