Financial success has always followed a similar pattern. Workers make money; they decide to either spend the money on consumption or save the money for investments. Banks turn the “surplus” of savings into investments that generate more business activity. You can unleash the potential of your savings by recognizing its importance in the never-ending economic cycle.
Since 2006, there has been a severe “Credit Crunch” leading to house depreciation and high unemployment. There is a high demand for money and a low supply of savings.
OECD “Household Savings Rates” data from June 2012 compared the savings rates of different countries. Germany, Switzerland and France had savings rates above 10% from 2006 to 2011. The United Kingdom had a savings rate ranging from 2.7 to 7.8% for the same period.
Scarce resources are valuable. In the present “credit-crunched” economic environment, your savings are gold. Your savings are important and can be used to help create new businesses.
Savings Account Loans
Most consumers are financially ignorant. They don’t know that there are many different types of loans available from financial institutions and banks. You could get a loan on your savings account. These offer attractive rates for people who are proven savers.
You can unleash the potential of your savings by asking financial institutions if they will let you borrow against it. You are a good credit risk because you have proven your frugality. You have already established a positive relationship with a bank, you are a proven winner.
“A Bird in the Hand is Worth Two in the Bush”
Many debtors are gambling on the illusion of future earnings. They might “hope” to make a great income in the future, but nothing is guaranteed.
On the other hand, you have achieved economic success by saving pounds. You know how to balance your budget to handle debts and credits. You have demonstrated your capacity for being financially astute and responsible.
Penny Wise and Dollar Foolish
Continue to be penny wise in borrowing against your savings. Carefully track the interest rate charged. Make sure you can handle the interest repayment schedule and amounts.
If you follow a pattern of saving and borrowing and saving, then you will find that your savings grow. As others consume too much, you should get a better interest rate on your savings. This is the natural ebb and flow of economics. Don’t become pound foolish with too much debt.
Banks need to attract savings, and Australian readers can make great use of flexible banks such as UBank to make the most of their savings. Take advantage of the credit crunch by growing your wealth with a wise use of your savings strength.