Savings and Loans
Human life can best be described as unpredictable. One never knows what the future has in store for us. We may become a millionaire the next moment or fall in a major financial crunch. So, one needs to take decisions keeping in mind the uncertainties of life. Yet, everything can never be planned. Or to say it in a better way, planned things can not always be applied to life. One has to change decisions in accordance to what the life offers us. For generations, in fact from the beginning of this universe we have been trying to take control of the future and our life but the reality is that human beings have failed miserably in this Endeavour. Circumstances play a vital role in our life and thereby, force us to change our planning and act according to them, not in accordance to our will.
The same principle applies when it comes to financial matters. You can never take your financial future for granted. So, no matter how carefully you step ahead and take all precautions, some unforeseen and unfortunate events let you end up in a difficult financial position. In such situations, two things help a lot- savings and loans. The savings that you have accumulated in the past greatly help in your bad days, when you need urgent finances. And loans help get you the extra required funds. Thus, savings and loans both are helpful in case of monetary crisis.
Savings can be done in the following forms:.
Investment in bonds, shares, debentures and securities.
Jewellery and expensive stones that have good resale value.
Bank accounts.
Land and Property.
Different life insurance, accident, theft, etc. policies.
Thus, savings in the above mentioned forms are helpful when one needs urgent finances. In absence of sufficient savings, it?s a valid option to resort to loans and credit that can fetch necessary money. Though an interest has to be paid along with the principle amount of the loan, availing loans is a sensible choice. Loans are basically of two kinds, secured and unsecured. As the name suggests, secured loans are supported by the borrower ?s assets (like car, home, land, etc.) and hefty amounts can be procured at low interest rates. On the other hand, unsecured loans don't necessitate the availability of the borrower's assets s security. These loans though carry a comparatively higher rate of interest than their secured counterparts; they invite less risk for the borrowers. This is because of the reason that the asset like home or property of the borrower that he has put as collateral in lieu of the loan amount can be seized by the lender if the borrower fails to repay the loan. So, to avoid the risk of repossession of home, most homeowners prefer availing unsecured loans, despite the fact that they carry high interest rates.
However, a majority of people resist the idea of taking loans when monetary needs arise. This is because of the psychosomatic burden that a loan, whether secured or unsecured, creates on the mind of the borrower. Everyone knows that loans are taken to be repaid and that too with an interest. And this fact is a sure enough reason for common masses to resist the temptation of going for loans. Savings thus, work as the best means of meeting the improbabilities that life presents. Cutting cost in present and putting some money aside every day, week, month or year, for future use always helps. One can also earn lucrative interest amounts on savings made. Most banks pay a nominal amount on the amount that the customers deposit in their bank accounts. Though this amount is not great enough but as it is said that something is better than nothing. Government bonds offer the highest rates of interest and one can actually double the amount invested by him in a few years. Thus, to save and invest is a sensible way of increasing money and improving your financial status.
Savings and loans apart from meeting your future financial needs, also help in a better flow of income and help to prevent stagnant money locked at home. A good flow of money is essential for a healthy economy. The loan industry works because people need to raise money from the market to meet their requirements. Thus, there is a mutual relationship between our needs and the needs of the economy. Bank loans and credit are one sure shot way of increasing the money supply. So, it is always advisable to realize your needs partially though loans and partially through own savings in different investment schemes.
The advantages of savings and loans are cited below:.
Help meet urgent financial needs.
Generate good flow of money.
Prevent stagnant money .
Leads to a healthy economy.
Savings and loans are two important pillar of any economy.
Other Articles
