Question

Explain the effect saving on the individual and society and identify traditional and modern iustitusion of saving

Answer 1

Full question:

Explain the effect of saving on the individual and society and identify traditional and modern institutions of saving

Answer and Explanation:

Saving means putting aside some part of your income for future expenditures and not spending it on current expenditures. Saving helps one be prepared for future unforeseen events or needs that may require money expenditures. Saving has positive effects on the individual and society at large because it encourages financial security and investments which have positive multiplier effects on the economy.

Example of traditional savings institutions are Iquib and Idir in Ethiopia. These traditional savings institutions are financial associations that work by forced savings whereby individuals are required to keep a fixed amount of their income with the institution periodically in order to save money.

Modern saving institutions include banks and insurance companies.