Saving money: it’s how you think about it

People save for a variety of reasons: to put money by for unforeseen contingencies; for retirement; for holidays or other expensive purchases; to leave money for a spouse or children after death; to avoid debt. Others save only because they think it is a good idea or that they ‘ought to’. Whatever the motive, saving not only has financial benefits, it can also improve psychological wellbeing and emotional health.

Of course, not everyone is in a position to save, particularly right now – for people with significant debt, living on minimum wages or chronically unemployed, saving is not a realistic priority. Yet for those who do have the means to save, and given its benefits, why do so few of us do it?

For instance, in the United Kingdom in 2019, of more than 27 million households, nearly 13 million had no savings at all, according to the Money Charity. So, approximately half of all Britons have no money of their own to fall back on or to use either short- or long-term. In the United States, average personal saving rates (the amount of disposable income that people put by) were around 7.6 per cent in 2019, and even below 5 per cent in the decade prior, which is significantly less than required to retire comfortably, according to financial commentators.

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