Saturday, 5 September 2015

Is Saving Money Worth It?

Growing up, saving money has always been drilled into our head. We had a piggy-bank and we were told of the importance of saving for a rainy day. I was lucky to grow up in a family where we never really had to worry about money and each day I was given some pocket money (which I did not spend as my mum always packed food for me to bring to school anyway), so that ended up in the piggy-bank. Over time, we we brought to the bank and told about depositing them in our own kiddy account. This continued even when my mum has already passed away. Saving has been quite easy for us as we were "trained" for that since young, but as our economy started to go on a downward slide, I wonder if it is all worth it anymore?

Granted, over time this money saving habits helped when I wanted to fork out money for anything say from deposit to buy something significant to the occasional treat. However, with our ringgit dropping from RM3.60 to RM4.25 in a matter of days or maybe weeks, how is the savings from Fixed Deposits supposed to compete with that drop? It was down nearly 20% and each year's interest yielded a max of 5%, usually ranging between 3-4%. A lot of people are saying if we do not go abroad and spend in our own country, this does not affect us. I beg to differ as many others when our products imported from various countries suffered a hike. The users would ultimately suffer as the merchandise would have to be priced up as well.

I guess what I am trying to say is that nowadays saving money unless there is a short term purpose doesn't seem to be worth it anymore especially if the savings are in Ringgit. Maybe saving in various other currencies will protect the value despite their lower interest rates. However, a sufficient amount put aside for a rainy day in my opinion is still important despite all the turbulence in our economy. What do you think?

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