Money has been considered as the prime resource in this materialistic world. Some people believe that it should be saved for the future usage in tough times while others assume it is better to increase the consumption for the strong economic growth of the country. I presume the balance of these both views is beneficial to save both the country as a whole or an individual.
There is a ground for the belief that the spending is vital for the growth of the nations. The stability of the economy is measured by means of Gross Domestic Product, which is called GDP in short. Consumption is required to increase this factor as increased usage by people increases the demand, which in turn give a rise in production which means higher GDP. For instance, if the demand for the product or the service increases, it is manufacturing increases, which give employment to many which again increases the spending giving rise in demand. This is a full circle and a break in one stage could harm this process and eventually the community. On the contrary, if this spending is fuelled by the credit more than the income, then consumers would be brought under the mountain of the debt. A prime example is the American citizens who are under higher debits owing to their extravagant nature of spending more than earning. Thus, expenditure according to the income is crucial.
On the other hand, the value of the thrift is important for both the industry and the individual to fight with the catastrophic situations. Firstly, the corporate saving would save the company in times of the crises when it does not get the loan from the bank. Secondly, if the mass population would deposit money in the bank, then it can be used for a loan to the corporate for capital gains. Thirdly, domestic conservation can save the family at the time of calamities like natural disasters and recession. On the contrast, if more and more folks start savings at the cost of the consumption, the cycle of the demand-supply will be breached which can harm the development of the society. For example, fewer requirements mean less production this causes higher cost which again lessens the demand and finally the industry. Thus, it is imperative for citizens to save enough to cope up with unwanted situations, but not at the limit which affects the GDP.
To sum up, saving and spending fulfil the individuals and economy needs. However, too much in both ways will dangerously lead to unnecessary things, so, everyone should know when to spend and save for the sake of the whole. It is just a matter of balancing things in a proper way.
Money has
been considered
as the prime resource in this materialistic world.
Some
people
believe that it should
be saved
for the future usage in tough times while others assume it is better to
increase
the consumption for the strong economic growth of the country. I presume the balance of these both views is beneficial to
save
both the country as a whole or an individual.
There is a ground for the belief that the
spending
is vital for the growth of the nations. The stability of the economy
is measured
by means of Gross Domestic Product, which
is called
GDP in short. Consumption
is required
to
increase
this factor as increased usage by
people
increases
the
demand
, which in turn give a rise in production which means higher GDP.
For instance
, if the
demand
for the product or the service
increases
, it is manufacturing
increases
, which give employment to
many
which again
increases
the
spending
giving rise in
demand
. This is a full circle and a break in one stage could harm this process and
eventually
the community.
On the contrary
, if this
spending
is fuelled
by the credit more than the income, then consumers would
be brought
under the mountain of the debt. A prime example is the American citizens who are under higher debits owing to their extravagant nature of
spending
more than earning.
Thus
, expenditure according to the income is crucial.
On the other hand
, the value of the thrift is
important
for both the industry and the individual to fight with the catastrophic situations.
Firstly
, the corporate saving would
save
the
company
in times of the crises when it does not
get
the loan from the bank.
Secondly
, if the mass population would deposit money in the bank, then it can be
used
for a loan to the corporate for capital gains.
Thirdly
, domestic conservation can
save
the family at the time of calamities like natural disasters and recession. On the contrast, if more and more folks
start
savings at the cost of the consumption, the cycle of the demand-supply will
be breached
which can harm the development of the society.
For example
, fewer requirements mean less production this causes higher cost which again lessens the
demand
and
finally
the industry.
Thus
, it is imperative for citizens to
save
enough
to cope up with unwanted situations,
but
not at the limit which affects the GDP.
To sum up, saving and
spending
fulfil the individuals and economy needs.
However
, too much in both ways will
dangerously
lead to unnecessary things,
so
, everyone should know when to spend and
save
for the sake of the whole. It is
just
a matter of balancing things
in a proper way
.