Savings are part of money, which not used for consumption, and saved to gain more money. Per se, it is individual income without your expenses.
Let’s talk about pension. It is hard for working person with average income to imagine how it is possible to survive with pension in amount of three thousand soms. In principle, most of us just survive from salary to salary in spite of efforts and attempts to avoid money spending for small things not to mention expensive purchases.
Major part of the Kyrgyz citizens spend own income for the most necessary in daily life. Nevertheless, they have to save almost every penny. And how will we live after retirement? It is obvious that the state will pay us pension, which is so tiny to buy something we need. Therefore, we have to think about it now and start to save money additionally.
We are not talking about “mattress” capital – key “instrument” of savings of many generations of our grandmothers and grandfathers.
Money must work!
Fact that we have to save money for future or unpredicted situations is known to everybody. But what we can save if everything is consumed for current expenses?
There is only one answer. We have to learn financial planning. And then you will understand that you can start to save small amounts. Try to analyze where do you spend money during day? After such monitoring, you will discover that every day you can deduct about 50-100 soms for savings.
And do you know how your capital will grow id you could exclude from your expenses only 50 soms per day, and replenish your bank account by 1500 soms a month (i.e. 50 soms a day)?
In one year, you will save 18 thousand soms, and in ten years – 180 thousand soms. It is necessary to take into account that you can get interest from savings. There are banks at the market, which can offer you account for longer period. There are the non-state pension funds, private management companies and companies issuing their own bonds and shares. Now, we are not going to tell details regarding effective savings management with income generation, we will allocate another time for these purposes.
Skeptics say that inflation will “eat” interest of savings. But if we even “neutralize” interest, deducting inflation rate, fact is the fact: saving of small amounts, you even do not pay attention to them, anyway allows you to make more money.
In any case, you have to decide when and how you want to think about secured life after retirement. Earlier you decide and start to save, more chances you have to save money for decent old age.