What is the Definition of Saving?

Definition Knowing

Saving, as such, is to reserve or save part of the income that is ordinarily obtained. Saving is also saving money to dispose of it as a forecast in case of future needs. Also, saving is the act of avoiding spending or consumption.

Saving, as such, is synonymous with forecast. Its importance lies in the possibility of having money for emergencies or unforeseen expenses that may arise in the future.

In the same way, you can save in a planned way to realize future plans, such as trips or ventures or for the purchase of movable or immovable property, the cost of which requires a medium and long-term saving effort.

Saving can be done by anyone who has some type of income and who wants to dispose of that surplus in the future. They save individuals, families, businesses, even countries.

The common thing is to save during the most productive stage of our lives, which usually occurs between the ages of 20 and 65. You save by various circumstances: to always have extra money, to buy a house, set up a company, have more money for retirement, etc.

Currently, banks have various financial instruments for those who wish to save, such as savings accounts or investment funds.

Etymologically, the word savings derives from horro, which comes from the Hispanic Arabic hurr, and this in turn from the classical Arabic hurr, which means ‘free’.

Types of savings

There are two fundamental types of savings taking into account its purpose and the type of entities or persons that carry it out. In this way, there is

  • Private savings, which are those made by individuals, families, institutions and companies, and
  • Public savings, which is what the State makes from the surplus of its income.

Retirement Savings

The retirement savings is one that people do voluntarily , throughout their working lives in order to have that money to the time of retirement or retirement, to spend the years of old age. As such, it can be done by placing part of the income in a Retirement Fund Manager (Afore).

Savings and investment

The savings and investment are concepts united in economic dynamics. While saving involves the act of reserving money to be used in the future, the investment is the placement of capital with the intention of obtaining, in the future, a profit or benefit. However, understood within an economy, these are processes that have a certain interdependence, since people’s savings allow funds to be available to invest in new projects and ventures that foster a stronger, more prosperous and dynamic market.