Saving is the act of setting aside income that is not spent on immediate consumption, effectively deferring consumption to a later time. It involves holding back a portion of your earnings rather than using it for current expenses, thus creating a financial reserve for future use
. In economics, saving is broadly defined as any income not used for immediate consumption, including money put into deposit accounts, pension funds, or kept as cash. It typically involves low-risk preservation of money, distinct from investing, which carries higher risk but potential for higher returns
. People save for various reasons, such as preparing for emergencies, retirement, large purchases (like a home, car, or education), or other future financial goals. Savings provide financial security by helping cover unexpected expenses and avoiding debt
. The key characteristics of saving include:
- It is income left over after paying for living expenses and obligations
- Savings are usually kept in safe, low-risk accounts like savings accounts or certificates of deposit (CDs), often earning low interest
- Saving is a habit or activity occurring over time, distinct from savings, which refers to the accumulated amount at a given moment
In summary, saving means setting aside money now to ensure financial stability and meet future needs or goals, often by keeping funds in low-risk, accessible forms
