THE ROLE OF PERSONAL SAVINGS IN NATIONAL ECONOMIC DEVELOPMENT

The position of personal savings in countries vis~a~vis the nation economic development is quite significant and note worthy. The position of personal savings and portfolio investment must not just be put aside for more growth and development of a nation, country or even a state as a sub-country.


For this potential entrepreneurs needs to be very conservant with this development. This article then will have to enlighten us about some key point we can handle as an entrepreneur to make it happens.

Before we move into the large pool of the topic, let quickly discuss about this (2) three keywords

1. Income 
2. Savings

INCOME: it is generally defined as the money that one receives as the

consequence of the nomal process or activities of an individual or a business.

Internationally, the term income is more like revenue, let see it from this angle, the INTERNATIONAL ACCOUNTING STANDARD BOARD uses this definition :

"income is the increase in economic benefit during the accounting period during the period of inflows or enhancements of assets or decrease of liabilities that result in increases in equity, other than those relating to contributions from  equity participants.".

And for its role in the national development simply means that the amount of income of individual will be in percentage of what he/she pays as tax for economical growth or development.

SAVINGS : let us say, it is putting money aside, for example you can put money in bank maybe for interest purposes or saving purpose or it might be a pension plan, anyways its still a way to keep your money somewhere which will be useful for the

person collecting it either for him to build up a business which might be domestic or foreign and he gains profit from it whereas your money is always available because much people save into this safe hand (bank)

In a broader sense, saving is typically used to refer to economizing, cutting cost, or to rescue someone or something.

In term of personal finance, saving is like keeping /preserving your money for later use or later need in the future, don't mix this up with INVESTMENT which involves many risks.

Let me quickly enlighten you about this, the thing is SAVING is differ from SAVINGS I.e the first refer to putting aside money for future use, whereas the second refers to money itself once saved. I think you aren't confuse, for example

~ You may decide to start saving 10% if your income; because you aim for your savings to grow into an amount sufficient to buy a car.

AFTER ANALYZING ALL THIS, WE SHOULD MOVE INTO ANALYZING THE ROLE PERSONAL SAVINGS CAN PLAY IN HELP THE COUNTRY OR NATIONAL ECONOMIC DEVELOPMENT :

1. It renders Indirect help to young entrepreneurs : you might decide to save your money in bank, but bank give out your money as loan to potential entrepreneurs and indirectly you affect other people's life with you saving which can in one way or the other help national growth or development, because when much successful companies are much in a country, many investors from many part of the world comes to venture in that plan and through this, it helps the face of that country in face of the universe, now you see what your personal saving can got others.

2. It's serves as your future RELIANCE :your personal savings is one thing you hold onto when everything seems difficult at a moment, personal saving can help you yourself to establish yourself and create good business that makes you get to the stage of developing your country economically in face of the world.

3.  Your personal saving could be use by government as loan to then : some politicians might loan money from bank for campaign, and campaigning might involve constructing toads, doing bridge which might in one ways or the other help national economic growth or development, it is good to save for safe purpose.

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