Saving represents a portion of income that is not intended for investment or spending, these are a section of money that is saved for future forecasts.
To generate savings, the income received must be greater than the expenses generated in a certain period, this ratio of income minus expenses allows determine the portion of net income that will be available to be saved, being able to be its totality or only a portion of the same.
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To carry out a savings plan it is necessary to establish a budget that allows determining what money is available, if expenses exceed income it is necessary establish financial planning that allows to reduce expenses until generating a surplus of income that can be used for savings reserves.
This practice can be carried out both by natural persons, in personal and family finances, as well as by legal persons in the business sector.
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In economic and financial terms you can find different types of savings according to different characteristics, according to your property, according to its term, according to its objective and according to the savings method.
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In this article you will find:
Types of savings according to your property:
This type of savings can be classified according to the origin of the property right of savings in public and private.
Public savings.
Public savings are those generated by the state and public institutions and whose reserve is generated by subtracting from the income received from taxes and other types of economic income, the public expenses generated during a certain period, the result of which, if positive, generates a surplus that can be a source of savings for provisions future.
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This type of money reserves can be used for different state purposes, for example to finance public works.
Private savings.
Private savings is that carried out by individuals, family nuclei, companies or non-profit organizations, that do not depend on the state, in which said saving is the result of ordinary income less usual expenses in a period, which, in the event of an excess of income, part or all of it can be used to generate reserves of money.
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Types of savings according to the term.
The types of savings according to the term represent the period of time in which the savings reserve will be kept for a certain purpose, which can be short to medium or long term.
Short term savings.
Short-term savings are represented by those sections of money that are intended to be spent or invested in periods less than 1 year, usually to cover unforeseen expenses, such as the cost of repairing a vehicle.
Medium-term savings.
Medium-term savings span periods longer than 1 year up to 5 years, this type of money reserves is usually used for investment activities in order to obtain a profitability, also for the acquisition of assets, for example, for the purchase of a car, among other purposes.
Long-term savings.
Long-term savings represent money reserves that are made over long periods of time thatspan more than 5 years, is usually used as mechanisms to finance expenses of the children's university, for the acquisition of real estate or for retirement reserves.
Types of savings according to your objective:
The savings can be used for different purposes, both in personal finance, in the business sector and in the public sector, as a mechanism to finance objectives or projects, Among this type of savings we can find, savings for emergency, for retirement, for children, for projects, among others purposes.
Savings for emergency.
This emergency reserve is intended for any unforeseen event that only under strictly necessary circumstances will it be available, such as medical expenses, in case of accidents, natural disasters or other emergency situations.
It is one of the most recommended money forecasts in financial planning, since it allows to solve any emergency eventuality without greatly affecting the budget to carry out activities everyday.
Retirement savings.
Saving for retirement is usually one of the most common types of savings, since this type of money reserves lets createa stable equity to guarantee a good quality of life in times of retirement.
Savings for the children.
Creating a savings fund for children is a mechanism that allows you to guarantee your children's financial future to cover necessary expenses how are university expenses and whose savings fund can be created from the moment they are born.
Savings for projects.
Project savings can be used in both public and private finance, creating a fund that allow to finance a certain purposeThey can be for home remodeling or to finance business projects such as market expansion, innovation projects, among others, their purpose can be very varied.
Types of savings according to the mechanism.
In saving as a mechanism to generate a money reserve for future provisions, can be found two types according to the method or means by which you save, this type of reservation can be formal and informal.
Formal savings.
Informal savings are those that are channeled through financial institutions that offer financial services to their clients in the custody of the money deposited, offering other savings plans that allow them to obtain a return on money for their clients deposited.
Among the products offered by financial or banking entities are, savings banks at the sight, term savings accounts, micro savings, among other products that may vary depending on the entity financial
Informal savings.
Informal savings are those in which the safeguarding of the money is not done through financial entities authorized for this purpose, since the money saved is safeguarded in a place considered safe for the saver, such as through safes.
