Thursday, January 6, 2011

Savings

Savings refers to the amount of money a person puts aside to spend at a future date. Technically it is income less expenses. The amount of savings compared to income is known as the personal savings rate; economists use this data at an aggregate level to determine trends in personal savings rates, as well as analysis around national savings rates. Savings is an important aspect in economics due to its association with investment and capital formation. It is also a critical aspect of personal finance, as saving is an important element of sound personal financial management. Savings may also refer to debt reduction (this is merely a use of the funds, other uses may be to put the savings into cash, or investment products like shares or mutual funds). It is important to save in order to reach financial goals like sufficient retirement income, starting a business, etc.

Synonyms: Personal Savings, Contributions, Investments

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If you have any further questions or would like to add to this fund management term, then please submit your thoughts below.

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