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Savings

Savings refer to the portion of income that is not spent on consumption and is set aside for future use. Savings can be stored in various forms, including bank accounts, investments, or cash. People save money for a variety of purposes, such as emergencies, large purchases, or retirement. Savings are crucial for financial security and help individuals manage unexpected expenses without relying on credit or loans.

Example

A person sets aside 10% of their monthly income into a savings account to build an emergency fund for unforeseen expenses.

Key points

• The portion of income set aside for future use rather than immediate consumption.

• Can be stored in savings accounts, investments, or cash.

• Important for financial security and managing unexpected expenses.

Quick Answers to Curious Questions

Savings provide a cushion for unexpected expenses, helping individuals avoid debt and maintain financial stability during emergencies.

People save for emergencies, large purchases (e.g., a home or car), retirement, and future financial goals.

By budgeting, cutting unnecessary expenses, and automating savings deposits, individuals can consistently save more over time.

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