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Personal Savings and Insurance - Essay Example

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Devaney, Anong and Whirl (2007:176-177) suggests that with the increase in income and the lifestyle and technological improvements the perception of basic needs has also changed with the passage of time.
Basic needs are to be fulfilled somehow or the other so in order to avoid…
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Personal Savings and Insurance
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Download file to see previous pages at the very primitive reason behind an individual’s or a family’s savings is financial security which guarantees safety for the basic necessities for living. There is also a need of financial security for unexpected emergencies, illness or unemployment. This trend of saving for safety needs is very evident in families with income which is neither very large nor very small. Families with large income do not need to save for safety needs and families with small income do not have any extra sums to save for safety needs.
Individuals with smaller families prefer to save money for improving their lifestyles and like to spend on luxury items like vacation trips, nicer car and purchasing property. This trend is observed in people having no children. These luxury items tend to change the lifestyle of the individuals as a whole and give a substantial return to the individuals for their savings according to their perspective.
This tendency is present in all individuals but is mostly observed in family heads with larger incomes. Such individuals give priority to saving money for their relationships and consider saving for children’s education, gifts for relatives etc their responsibility.
When the individuals have fulfilled all the basic and primitive needs of their life, they move forward towards the higher objectives and for the fulfillment of those higher objectives they require savings. This trend is observed in older people with comparatively larger incomes who want to spend their money in charity and some of them also want to set up businesses of their own. The tendency is to achieve the goals which they set up for themselves at earlier ages of their lives.
6. The improving economic conditions nationally and internationally and recovery from recession is encouraging people to spend more and save a smaller proportion of the income because the economy is doing very well and they can rely on their spending and previous investments for financials security.
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