Slaves of our Desires
We Pakistani’s are slaves of our desires and thus have been rapidly losing the ability to build up our Financial Safety Net. These days the news cycle is dominated by the ‘bad condition of our economy', yet go to your nearest shopping mall and you will see people bustling from shop to shop.
This will make you wonder!
Where’s the money coming from?
Most of them are using their ‘Savings’ to satiate their desires and this is not the first time Pakistanis are engaging in this flamboyance.
As per a World Bank report, we save very less as compared to our peers:
- Last year we saved 20.01% of our GDP
- Indians saved 32.10% of their GDP
- Bangladeshis saved 35.24% of their GDP.
- Whereas the Chinese saved 47.01% of their GDP.
A recent research in which the participants were asked
‘How often do you save money for your top savings priority?’
yielded the following result:
As the above findings suggest, Pakistani's are at the tail end of this spectrum
What’s the need to Save Anyway? and How can one build out this habit?
A wise man once said:
‘A penny saved is a penny earned’.
Spending today instead of saving is like borrowing from the future
(Think of a person you know who used to spend less and is now very rich).
A smart way to build up savings is by following The 50/30/20 Rule, 50% of your income for vital needs, 30% for your wants (the watch you always wanted) and 20% savings (for your future), to ensure that these savings do not get spent, tuck aside these savings into Investments because Investments are accessible to spend but less instantly as compared to cash savings or money sitting in your bank account.
By ‘spending’ your savings on an investment, you will feel like you got something in return for your money, and it will be just a little bit harder to access. You get to enjoy the feeling of buying something when all you are really buying is your future.
FinPocket is on a mission to make finance simple, fun and fun. Please let us know your feedback in the comments section. Stay tuned to learn more about ‘how to save’ in our next blog... Let’s pocket the difference.