World Thrift Day to promote savings

By Surekha GALAGODA

"Waste is worse than loss. The time is coming when every person who lays claim to ability will keep the question of waste before him constantly. The scope of thrift is limitless. "

- Thomas A. Edison

October 31 was declared World Thrift Day at the end of the first International Thrift Congress in 1924 in Milan. According to Chairman National Savings Bank Pradeep Kariyawasam at the resolutions of the Thrift Congress it was decided that 'World Thrift Day' should be a day devoted to the promotion of savings all over the World. The idea of the World Thrift Day was not born out of nothing.

There had been some examples of days that were committed to the idea of saving money to gain a higher standard of life and to secure the economy.

After the Second World War, the World Thrift Day reached the peak of its popularity in the years between 1955 and 1970. As Thrift Day is celebrated to inculcate the habit of savings, to encourage this habit, the National Savings Bank has launched various schemes and programs over the years, with the support of the schools, the clergy, as well as cultural, sports, professional, and women's associations.

Realising that, savings are essential for the development plans of the country as well as of the world, and NSB has made tremendous achievements in mobilisation of economic resources.

Sri Lankans are now awaiting the victory in the 'economic war', in a manner similar to our victory in the war against terrorism. President Mahinda Rajapaksa and his government are well prepared to face this challenge with the belief that our economy should be independent, resilient and disciplined, with a strong growth focus, operating as per international standards, whilst maintaining our local identity.

Therefore, over the next five years a special emphasis will be on implementing our country's National Economic Policy; which will take our collective aspirations into account, said Kariyawasam.

Futuristic

To support the above process the National Savings Bank stands firmly with a futuristic view. Accordingly, this year NSB has declared a week from October 24 - 31 of October to mark the World Thrift Day.

In the week of thrift, special interest was paid to the promotion of savings in schools and several savings campaigns were organised in Schools islandwide.

Special courses have also been organised to educate children with the virtues of 'Thrift'. Savings tills and Bank Passbooks were distributed in schools.

The World Thrift day highlights the importance of consistently putting something aside to have a safety net to guard against risks from unexpected events and make it possible to achieve goals such as getting an education, owning a home, and perhaps starting a business.

Savings allow people to guard against risks like illness, unemployment, and other economic hardships. The savings accrued provide financial shelter on a rainy day, especially so given the current global economic down-turn.

Savings also allow people to build assets and provide opportunities to their children and grandchildren. Even those who are of limited means have been found to save a significant amount, though often through informal mechanisms such as literally storing cash inside of mattresses or buying goods and machinery that can be sold later. Kariyawasam said that the best place for savings is in the formal financial system where savings can earn interest rather than lose value due to inflation if money is stored in cash, or lose value, if it is in the form of goods and machinery.

At the same time as being important for the individual, the formal inclusion of savers in the financial system is of paramount importance for a country's general economic well-being.

Credits

The funds deposited into savings accounts can also be utilised as credits to serve a growing economy. In economics, personal saving has been defined as personal disposable income minus personal consumption expenditure. In other words, income that is not consumed by immediately buying goods and services is saved. Other kinds of saving can occur, as with corporate retained earnings (profits minus dividend and tax payments) and a government budget surplus.

There is some disagreement about what counts as saving. For example, the part of a person's income that is spent on mortgage repayments is not spent on present consumption and is therefore saving by the above definition, even though people do not always think of repaying a loan as saving. However, in the U.S. measurement of the numbers behind its gross national product (i.e., the National Income and Product Accounts), personal interest payments are not treated as "saving" unless the institutions and people who receive them save them.

"Saving" differs from "savings." The former refers to an increase in one's assets, an increase in net worth, whereas the latter refers to one part of one's assets, usually deposits in savings accounts, or to all of one's assets. Saving refers to an activity occurring over time, a flow variable, whereas savings refers to something that exists at any one time, a stock variable. It is now widely accepted that increased access to financial services in general tends to be associated with better economic growth and more even income distribution, leading ultimately to greater social cohesion and poverty reduction.

In developing economies, the existence of a diversified financial system that serves the general population as well as higher income groups is a key pre-requisite for alleviation of poverty, social and economic progress, and sustainable development. Unfortunately, poor people all over the world still lack sufficient access to proper financial services including savings accounts.

Savings and retail banks around the world are leaders in the expansion of financial services especially savings accounts. According to the WSBI of the estimated 1.4 b accessible accounts existing at institutions across developing economies of the world with an explicit mission to foster access, some 1.1 b is provided by savings banks.

Savings

The idea that we should put away savings for our future and our children's future is simple. This year, for World Savings Day, (formerly Thrift Day) the lessons that we have learned in the past two years of financial and economic crisis should be reflected upon. Real, long-lasting economic prosperity is a result of hard work, planning, and the simple idea that by putting aside small amounts of earnings, we can do great things for ourselves, our family, and our society.

Savings banks such as NSB, play an important role in enhancing savings in the country with certain campaigns and initiatives such as working with various organisations in order to increase the number of savings accounts and savings held by the citizens. We intend to continuously emphasise the impact of savings and its relevance to the economy and the individuals to the public. Most of the savings banks have launched very attractive programs therefore they will continue with them and not introduce anymore.

History

The World Savings Day was established on October 31, 1924 during the 1st International Savings Bank Congress (World Society of Savings Banks) in Milan, Italy. The Italian Professor Filippo Ravizza declared this day the "International Saving Day" on the last day of the congress. In the resolutions of the Thrift Congress it was decided that 'World Thrift Day' should be a day devoted to the promotion of savings all over the World. In their efforts to promote thrift the savings banks also worked with the support of the schools, the clergy, as well as cultural, sports, professional and women's associations.

Representatives of 29 countries wanted to bring to mind the thought of saving to the worldwide public and its relevance to the economy and the individual. The World Savings Day is usually held on October 31 except in countries where this day is a public holiday, since the idea is for the banks to be open, so that the people are able to transfer their savings into their accounts.

The idea of World Thrift Day was not born out of nothing. There had been some examples of days that were committed to the idea of saving money in order to gain a higher standard of life and to secure the economy, for example in Spain where the first national thrift day was celebrated in 1921, or in the United States.

In other countries, such as Germany, the people's confidence in savings had to be restored since many of them had lost their savings in the German monetary reform of 1923.

After the Second World War, World Thrift Day continued and reached the peak of its popularity in the years between 1955 and 1970.

It practically became a veritable tradition in certain countries. In Austria, for instance, the official mascot of saving, the so-called 'Sparefroh' (literally: 'Happy Saver', or rather "save happily!") reached a higher degree of brand awareness than the republic's President and even a street was named after him. In the 1970s the 'Sparefroh-Journal', an educational magazine for younger people, reached a circulation of 400,000 copies.