October 30th is World Savings Day. It should remind us that it is still worth putting a euro or two aside today. It doesn’t matter how much money is saved. It is rather important that savings are made with strategy.
- World Savings Day has been around since 1925.
- It is traditionally celebrated at the end of October.
- World Savings Day was introduced to bring people closer to saving and the value of money.
- The savings account used to be the most important investment.
- Today more and more investments are made in stocks and funds as well as capital-forming insurance.
How long has World Savings Day existed?
World Savings Day has existed since 1925. The first World Savings Day was celebrated on October 31, 1925. The goal associated with World Savings Day was and is to put money aside. This money is used to build up a balance that builds up a financial cushion in order to be able to access the money in old age or on special occasions. Despite the low interest rates , saving is just as important today as it was almost 100 years ago. However, saving must be viewed differently today than it was back then.
Who started World Savings Day and for what purpose?
In 1924 – a year before the first World Savings Day – the World Institute of Savings Banks decided to introduce World Savings Day at the international Savings Banks Congress. This Savings Banks Congress took place in Milan and had one goal: to make people understand that small amounts can be used to build up a fortune over a long period of time. The value of money should be internalized with this step.
At the time, saving was seen as a virtue and a practice that was fundamental to the progress of every individual in society. In every nation and for all of humanity.
Since that day it has been customary for the children to go to the Sparkasse or other banks with their full piggy banks on World Savings Day at the end of October and have their collected coins and bills deposited into their account or savings book. In German-speaking countries, savers are particularly hard-working. In Germany alone, savings within private households amounted to around 590 billion euros in 2018. And half of these amounts are still on savings accounts . Although these no longer yield the desired profit.
What significance does World Savings Day still have today?
Today World Savings Day no longer has the significance it had at the time. 100 years ago, saving was even more important than it is today. The German-speaking countries are still considered to be very diligent when it comes to saving, but consumers no longer have the immense pressure to put money aside.
Food and clothing are in abundance so that they can be bought anytime. We earn our living with work, have health insurance and receive a pension. And in an emergency, social support if there is not enough money. Despite everything, there are different forms of saving that are still pursued today and that are important.
Above all, children still have their money boxes, which are available in a wide variety of shapes, sizes and colors. Around half of all households have such a money box.
Additional traditional ways of saving include:
- Checking account
- Savings accounts
- Fixed deposit account
- Overnight money account
Even if very little interest can be earned with it at the moment, these traditional savings options are still popular. Because we like to play it safe, so that these traditional investments won’t disappear anytime soon. But they are being displaced more and more by funds and stocks .
Investments with returns
Over the past few decades, the approach and saving has changed somewhat. In the past, the savings book was the measure of all things; today, investments are available that generate higher returns . Their use is still hesitant. But the positive development in this direction can no longer be stopped.
Modern investments with good returns are:
- Shares, precious metals, raw materials
- Capital-forming insurance for old-age provision
- State funding programs such as the Riester pension
The modern investments are flexible and therefore the better choice when saving. They are more risky, but with a proper selection and support they bring good returns, which, viewed over a longer period of time, develop into a decent fortune. Provided that the saver is familiar with the selected products and can look after and control them properly.