The savings problem

[Etranger]

Newer generations need to be extremely innovative in order to be successful. A few decades ago, the middle class could purchase a house with an average job, while nowadays, a large number of people are living from paycheck to paycheck.

Purchasing a house with an average job was an opportunity few decades ago for middle class in the western countries, but in countries like Ukraine, for example, where I live, it was not and still is not an option at all. People here have to save for decades, and not only themselves, but join the efforts with the nearest family to make being an average, not big enough apartment possible. You have to be rally creative and think out of the frame to earn what in more developed economies is considered to be a small salary (2-3 thousand of dollars/euros). If it wasn't for crypto, my life would be much more difficult and poorer, because I would have to go to a 9-17/5 job and make approximately 500 dollars (and that would be way higher, than most of Ukrainians make).

[freedomgo]

I can tell about this problem by observing how most people live in my country. Loans for almost everything force people to work seven days a week. Closing one loan, another opens, and people live in debt without free money that could be invested. From here, it is noticeable that people are in a hole of debt, regularly saving every penny.
But yes, our desires do not end, and we can say that we can stop everything, but the pace of life and the developed habit of earning money practically do not allow people to stop and think that they can live differently.

I think this is due to a lack of money management, because there are so many applications or banks that are openly competing to provide loans with low or no interest.
that's what causes this generation to be trapped in debt.
I've seen some of my friends use it to cover their needs. I didn't ask why he borrowed money, I was afraid he would be offended.
but for most people born in 2000, borrowing money is almost a natural thing here, there are so many cases.

Most likely, it’s a wrong management of finances. Although taking a loan sometimes may be inevitable, but if you are doing it regularly and seems like you rely on it on every financial problem that arrives, then I must say you’re actually not doing the right thing. Do not tolerate yourself because in the end, you will only see yourself drown into debt.

Instead, save a little no matter how you find it hard to save. Manage your finances wisely, even if it means being deprived with comfortability in life but as long as you do it for future benefits, then it’s definitely worth doing.

[Renampun]

...

Bad financial management is certainly one reason people, and especially newer generations, are unable to save. A large number of people near my age in my circle are unable to save a single penny out of their paycheck, which makes me wonder what they're doing with their money. However, what the OP described is actually true: the cost of living has immensely increased, especially after Covid-19, the Ukrainian war, and now with the Middle East crisis that's disrupting the logistics chain once again. Salaries have hardly increased to compensate for the excessive costs of goods and services.

Newer generations need to be extremely innovative in order to be successful. A few decades ago, the middle class could purchase a house with an average job, while nowadays, a large number of people are living from paycheck to paycheck.

The emergence of sophisticated smartphones from year to year, the high cost of pleasure, and unimportant holidays, often become a big obstacle for the younger generation, especially those born after the year 2000, to save money. In my circle, many children born after the year 2000 do not have a job but their lifestyle is very high, I wonder where their money comes from, there are also many who are successful in making money from social media, especially TikTok. In conclusion, I really agree with you, today's young generation must be able to be more innovative and think outside the box, so that they can own a house in the future because expecting just a modest salary will not be enough to help them buy their dream house now it is impossible.

[doomloop]

I've observed a common trend among people around me prioritizing spending over saving. They often spend their income on immediate wants, like frequent cafe visits, leaving them with little to nothing for saving at the end of the month. This suggests that the issue might not be an inability to save, but rather a choice to prioritize immediate gratification. Unfortunately, this can sometimes lead to lifestyle-related debt.

Interesting, that's exactly what I recently observed in my environment. During Corona, many people saved money because many governments set up support programs and people couldn't spend their money. Now that the pandemic is over, people are craving life and consumption again and are spending even more than they did before corona. In addition, the economy is still stable in many countries, so many people feel they are financially secure. By the time the next major economic crisis hits, this will level out again and savings rates will rise again.

Different ways for different people living in different regions of the world. Some overspend because they can afford to do it and they have economic security because of their government. On the other hand, some are compelled to spend more than they may earn because of economic situations and increasing inflation, in such countries and regions, people barely earn enough to be able to fulfil the monthly expenses of their household and are compelled to borrow money now and then.

Situations are not the same for the whole world, which is unfortunate. This is the biggest reason why a lot of people migrate from one place to another, it's only with the hope that they might get a better life if they get out of the current situation.

[tbterryboy]

Not rocket science, saving. It's discipline. Instead of that extra luxury today, it's choosing stability tomorrow. Yes, they're watching you while you study, but that's no reason to relax. Now is the time to study and grow. Financial literacy? It's essential. Investing? Start young, profit later. Never wait for a crisis to understand your unpreparedness. The future? You have it; use it. Being proactive, not reactive. Not only making money, but sensible choices

Well, saving is only possible when you have or earn enough resources available. A person with a limited income cannot save anything even if they have discipline and financial literacy because when you don't have more money than you need, you won't be able to spare any and when you can't do that, it means no savings for you.

It's a blessing if one can start saving money at a young age because such people always have a bright future. When you are saving money while you are still young, you will have a good enough sum to build your assets when you grow older, and having assets means a better future.

So things like these are not possible for everyone, and those who can do them are guaranteed to have a great life ahead.

[stomachgrowls]

I've observed a common trend among people around me prioritizing spending over saving. They often spend their income on immediate wants, like frequent cafe visits, leaving them with little to nothing for saving at the end of the month. This suggests that the issue might not be an inability to save, but rather a choice to prioritize immediate gratification. Unfortunately, this can sometimes lead to lifestyle-related debt.

Interesting, that's exactly what I recently observed in my environment. During Corona, many people saved money because many governments set up support programs and people couldn't spend their money. Now that the pandemic is over, people are craving life and consumption again and are spending even more than they did before corona. In addition, the economy is still stable in many countries, so many people feel they are financially secure. By the time the next major economic crisis hits, this will level out again and savings rates will rise again.

Different ways for different people living in different regions of the world. Some overspend because they can afford to do it and they have economic security because of their government. On the other hand, some are compelled to spend more than they may earn because of economic situations and increasing inflation, in such countries and regions, people barely earn enough to be able to fulfil the monthly expenses of their household and are compelled to borrow money now and then.

Situations are not the same for the whole world, which is unfortunate. This is the biggest reason why a lot of people migrate from one place to another, it's only with the hope that they might get a better life if they get out of the current situation.

This is true on which there's no way that we could really be able to make out those kind of conclusions on why other people cant really be able to save up.Just like me into those previous years on which i dont
really have the time or situation that i couldnt be able to save because of too much expenses or being that negative with my salary which i do even have debts or loans on which it would really be impossible
for you to set aside some amounts for you to be able to save up.This is why we cant really be able to judge someone on what are the challenges or things that they do face in life for them they cant be able to save.
What if you do really want to save but due to those real life situations then you cant be able to do so.

This is why on the time that you do have that kind of opportunity on saving up then it would really be that best that you should really be doing that
so you would really be able to make yourself having those possible back up funds for emergency and for some investment purposes.

[Sorryfor]

This is really sad. Only those who are middle class can understand this well. Far from saving their wealth, most of the middle class people take loans from various NGO to meet their needs and at the end of the year they find themselves entangled in another loan while repaying their loan. Thus it keeps coming back in cycles. Later, they cannot accumulate wealth through this. If the money is not invested in a good place at the end of the day then it is never possible to achieve solvency And it is not possible to go to the dream future. So in this case one must be careful in earning and spending money.

[slapper]

I've observed a common trend among people around me prioritizing spending over saving. They often spend their income on immediate wants, like frequent cafe visits, leaving them with little to nothing for saving at the end of the month. This suggests that the issue might not be an inability to save, but rather a choice to prioritize immediate gratification. Unfortunately, this can sometimes lead to lifestyle-related debt.

Interesting, that's exactly what I recently observed in my environment. During Corona, many people saved money because many governments set up support programs and people couldn't spend their money. Now that the pandemic is over, people are craving life and consumption again and are spending even more than they did before corona. In addition, the economy is still stable in many countries, so many people feel they are financially secure. By the time the next major economic crisis hits, this will level out again and savings rates will rise again.

Different ways for different people living in different regions of the world. Some overspend because they can afford to do it and they have economic security because of their government. On the other hand, some are compelled to spend more than they may earn because of economic situations and increasing inflation, in such countries and regions, people barely earn enough to be able to fulfil the monthly expenses of their household and are compelled to borrow money now and then.

Situations are not the same for the whole world, which is unfortunate. This is the biggest reason why a lot of people migrate from one place to another, it's only with the hope that they might get a better life if they get out of the current situation.

This is true on which there's no way that we could really be able to make out those kind of conclusions on why other people cant really be able to save up.Just like me into those previous years on which i dont
really have the time or situation that i couldnt be able to save because of too much expenses or being that negative with my salary which i do even have debts or loans on which it would really be impossible
for you to set aside some amounts for you to be able to save up.This is why we cant really be able to judge someone on what are the challenges or things that they do face in life for them they cant be able to save.
What if you do really want to save but due to those real life situations then you cant be able to do so.

This is why on the time that you do have that kind of opportunity on saving up then it would really be that best that you should really be doing that
so you would really be able to make yourself having those possible back up funds for emergency and for some investment purposes.

Nobody's blaming anyone. Life delivers curveballs, and sometimes you just need to sidestep them, not hit a home run. Excuses don't grow savings accounts; actions do. Not having too much money at the end of the month; priorities. You can't save? Increase your expense scrutiny. Something can always give. Yes, those self-indulgences we think we deserve. The truth? You deserve more money freedom. Start small if necessary. Extra change adds up. Discipline, not rocket science

You shouldn't splurge when the tides flip, which they will. Double your savings with this golden ticket. An emergency fund? Check. Investment? Next up. It's about making money work for you, not making money. Please be honest about where your money is going and start steering it

[Raflesia]

Most likely, it’s a wrong management of finances. Although taking a loan sometimes may be inevitable, but if you are doing it regularly and seems like you rely on it on every financial problem that arrives, then I must say you’re actually not doing the right thing. Do not tolerate yourself because in the end, you will only see yourself drown into debt.

Instead, save a little no matter how you find it hard to save. Manage your finances wisely, even if it means being deprived with comfortability in life but as long as you do it for future benefits, then it’s definitely worth doing.

Being trapped in a situation where we have to look for loans in order to pay other debts is indeed a trap that sometimes makes us someone who is difficult to make changes but on the other hand it is difficult to get out of a zone like this if not with a strong desire to make a gap and improve yourself.

Money management is sometimes very easy to say but difficult to do especially for those who are in a low economic strata that requires them to take loans so that they can still survive in a hard life like now but I agree if indeed the tendency to borrow money actually makes your risk of destruction stronger.

[Dewi Aries]

Not rocket science, saving. It's discipline. Instead of that extra luxury today, it's choosing stability tomorrow. Yes, they're watching you while you study, but that's no reason to relax. Now is the time to study and grow. Financial literacy? It's essential. Investing? Start young, profit later. Never wait for a crisis to understand your unpreparedness. The future? You have it; use it. Being proactive, not reactive. Not only making money, but sensible choices

Well, saving is only possible when you have or earn enough resources available. A person with a limited income cannot save anything even if they have discipline and financial literacy because when you don't have more money than you need, you won't be able to spare any and when you can't do that, it means no savings for you.

It's a blessing if one can start saving money at a young age because such people always have a bright future. When you are saving money while you are still young, you will have a good enough sum to build your assets when you grow older, and having assets means a better future.

So things like these are not possible for everyone, and those who can do them are guaranteed to have a great life ahead.

It is true that saving is done if we already have enough income, because having income can help us to meet our own needs such as our own will because I think everyone has their own will so to be able to get it we must have a clear income, and also with a clear income we can save to prepare for the future, of course the future must be prepared from now on because if it's too late it will be difficult.

many young people are currently only thinking about the trendy style so they only spend their money to buy things that are only temporary because young people have high prestige so it's only natural that they only think about a luxurious lifestyle in their youth, but it's true as you say saving in youth is good and in my opinion there are rarely young people who can save consistently. by saving in youth of course it can make us have savings whether it's money or assets that are clear for the good of the future and that's good.

[kawetsriyanto]

Being trapped in a situation where we have to look for loans in order to pay other debts is indeed a trap that sometimes makes us someone who is difficult to make changes but on the other hand it is difficult to get out of a zone like this if not with a strong desire to make a gap and improve yourself.

Money management is sometimes very easy to say but difficult to do especially for those who are in a low economic strata that requires them to take loans so that they can still survive in a hard life like now but I agree if indeed the tendency to borrow money actually makes your risk of destruction stronger.

It is a loan trap. You will get difficulty in getting out of the debt cycle if you don't take an extreme action by stopping the debt/loan. In some cases, we must sell our lovely goods to pay the loan, maybe selling our motorcycles, cars, or lands. But after the loans/debts can be solved, I'm very sure that we will have a better life again.

It will never be easy to manage the financial in a proper way. People have the natural desire to feel interested in many things. If we can't deal with the desire, we may get trapped on the loan because it requires big money. When we have limited money, loan is one of the interesting solution to do. That's why people who have bad control on their desire, they easily got a problem on the loan trap.

[franky1]

to escape the loan trap is achievable
look over the last 5-6 months and look at the average balance you spend using a credit card. and then how much income you then put into the credit card to pay it down

now you know you are able to pay credit cards because you have been doing so.. so there was wiggle room to make repayments.... so now you know you can,.. so now just try to stop resorting to credit. by actually taking a month break from spending on anything beyond your housing costs..
and when times are good PRETEND its another bad month and ..(make it an imaginary target balance) and then start paying yourself
pretend you needed to buy something and then 'pay the balance off' by putting your income into another debit card you own treating YOUR debit card  as if its you paying down a credit card, by paying upto a budget of the imagined spend into debit card
treat yourself as the credit bank.

get upto an amount that you can use as a rescue amount. and now you dont need to use credit again, because now your debit card is your own personal credit card.. if you deplete the balance(limit) you need to pay yourself back to refil the budget. instead of a credit company the budget amount is then treated as your credit limit

..
i find it funny people are willing to have 6 credit cards in their pants pocket. but dont set up 4 debit cards giving each debit card a purpose, like bills, groceries, essentials, emergencies, living within the limits

where they at start of month divide funds up into each debit card..

if you WERE able to divide up your income to pay down credit cards.. use that skill. but putting money towards your own divisions of income into your own debit cards.
where you then live within the budgets. treating the budgets of debit cards as credit limits.. where by when using up the limit/budget. you then refill debit(like paying down credit)
its the same skill but in money positive direction instead of money negative direction

[Raflesia]

Being trapped in a situation where we have to look for loans in order to pay other debts is indeed a trap that sometimes makes us someone who is difficult to make changes but on the other hand it is difficult to get out of a zone like this if not with a strong desire to make a gap and improve yourself.

Money management is sometimes very easy to say but difficult to do especially for those who are in a low economic strata that requires them to take loans so that they can still survive in a hard life like now but I agree if indeed the tendency to borrow money actually makes your risk of destruction stronger.

It is a loan trap. You will get difficulty in getting out of the debt cycle if you don't take an extreme action by stopping the debt/loan. In some cases, we must sell our lovely goods to pay the loan, maybe selling our motorcycles, cars, or lands. But after the loans/debts can be solved, I'm very sure that we will have a better life again.

It will never be easy to manage the financial in a proper way. People have the natural desire to feel interested in many things. If we can't deal with the desire, we may get trapped on the loan because it requires big money. When we have limited money, loan is one of the interesting solution to do. That's why people who have bad control on their desire, they easily got a problem on the loan trap.

Sometimes people like this also have a big worry about borrowing but it's not that they can't repay the loan but that they can't get the loan back after they've paid off the debt.

I've seen this situation in my neighborhood when someone who works for a bank came to people's homes to survey and collect the last few months' payments from customers who took out loans.

They try to re-offer loans on the grounds that when closing and not borrowing again then future borrowing will be complicated but this is precisely what makes conditions more complicated where ordinary people are still not too aware that in the end we have to stop activities like this so that our economic conditions become better but with the fear that they cannot borrow money again at the bank, this becomes a very difficult thing for customers to avoid.

[erep]

Sometimes people like this also have a big worry about borrowing but it's not that they can't repay the loan but that they can't get the loan back after they've paid off the debt.

What do you mean by the borrower will have difficulty getting a new loan after paying off the previous debt, in my opinion it is easy to get a new loan if you have collateral as tools/goods to use until the loan is paid off, some people turn loans into profitable businesses but they set strict conditions and high loan interest , so they often depend on loans and will not stop applying for more loans after they have paid off the previous loan.

They try to re-offer loans on the grounds that when closing and not borrowing again then future borrowing will be complicated but this is precisely what makes conditions more complicated where ordinary people are still not too aware that in the end we have to stop activities like this so that our economic conditions become better but with the fear that they cannot borrow money again at the bank, this becomes a very difficult thing for customers to avoid.

Some bank workers often deceive customers who are still unclear about the terms and conditions of loans, they deliberately scare customers by providing false information as if there are new conditions that will make it difficult if they do not apply for a new loan before the final payment in full on the previous loan. We know that the target of bank workers in the field is specifically to achieve the target of new customers who apply for loans. If their performance experiences a decline due to not achieving the new loan target, they will be dismissed or their contract will not be extended.

[junder]

Most likely, it’s a wrong management of finances. Although taking a loan sometimes may be inevitable, but if you are doing it regularly and seems like you rely on it on every financial problem that arrives, then I must say you’re actually not doing the right thing. Do not tolerate yourself because in the end, you will only see yourself drown into debt.

Instead, save a little no matter how you find it hard to save. Manage your finances wisely, even if it means being deprived with comfortability in life but as long as you do it for future benefits, then it’s definitely worth doing.

Being trapped in a situation where we have to look for loans in order to pay other debts is indeed a trap that sometimes makes us someone who is difficult to make changes but on the other hand it is difficult to get out of a zone like this if not with a strong desire to make a gap and improve yourself.

Money management is sometimes very easy to say but difficult to do especially for those who are in a low economic strata that requires them to take loans so that they can still survive in a hard life like now but I agree if indeed the tendency to borrow money actually makes your risk of destruction stronger.

In life there are certainly ups and downs, therefore it is not strange if we experience events that require us to borrow money, whether from the bank or from other people. but what is clear is that this is actually tricky but also helpful. For example, if we have an accident and don't have enough savings, maybe the only way is to take out a loan, but even though this is a trap, it can help. People nowadays tend not to think about the future, so they only have money to prioritize pleasure.

having savings or an emergency fund is important, because in my opinion this can help us in the future to deal with unexpected things such as accidents that require hospital treatment costs, and of course that's not a small amount, therefore we should be able to save in addition to future also for sudden needs. What you say is true, money management is sometimes easy to say, not easy to do or implement, many people experience wasting money by buying things that are actually not that important to them, and I think they don't think about the future or save. In my opinion, recording expenses must be done, the aim is to minimize unnecessary expenses, before spending money to buy things that are not too important, you have to think about it first and consider it well.

[kawetsriyanto]

Sometimes people like this also have a big worry about borrowing but it's not that they can't repay the loan but that they can't get the loan back after they've paid off the debt.

I've seen this situation in my neighborhood when someone who works for a bank came to people's homes to survey and collect the last few months' payments from customers who took out loans.

They try to re-offer loans on the grounds that when closing and not borrowing again then future borrowing will be complicated but this is precisely what makes conditions more complicated where ordinary people are still not too aware that in the end we have to stop activities like this so that our economic conditions become better but with the fear that they cannot borrow money again at the bank, this becomes a very difficult thing for customers to avoid.

As far as I know, when we succeed to repay our loan on the banks, it must be easier to get a new loan because we have a good history in borrowing money. Why it will be difficult to get a new loan? Banks must try and try again to get the customers, surely they will persuade us to have a new loan. Even, the banks ensure us with some benefits if we want to have a new loan. They will make is easier in processing the new loan. This is what I experienced for borrowing money on the banks.

It is not a surprising thing if we see some bank employees come to people's homes. In the villages, it is something usual because they can easily get the customers in this way. The bank employees get some money if they succeed to get customers. The banks sometimes set a target for their marketing, they must have certain number of customers in a year.

CMIIW

[Mauser]

So aside of the social security bubble potentially bursting in the future, there's also a bigger underlying issue.
Purchasing power has only been getting worse from generation to generation, and thus being able to make any savings is already a distant dream for most. Younger people just keep working more for less, to s point now where mostworking people can't put even a single dollar aside.

Could there be a solution for these issues? Economists have long argued about the strengths and failures of our economic system, but alas it appears as though "trickle down economics" has failed humanity.

So, do you agree that radical changes are needed?

No, I don't really think that we need a radical change at the moment. The world just recovered from the covid pandemics and inflation surge due to food and energy prices rising. A radical change to our economic system could make things worse instead of better. I would rather prefer a few years of calmness with some return to normality instead of another crisis. The thing with purchasing power is that inflation has been higher than the wage growth for a long period of time. The central banks are targeting 2% inflation per year, but in most jobs, we are not getting that 2% wage growth per year. Which means that we are losing real money every year. Which is why it's so important to invest money. Saving alone is not going to lead anywhere, the savings rate is usually below or at the same level as the inflation rate. So, in real terms we are not gaining anything. Only when we invest our money and aim for higher returns, we will be able to grow our money and make sure that the purchasing power of our money grows as well. It's all about making the first step and taking some money aside for investing, over time through profits and dividends our investments will grow and we build up our portfolio.

[adiksau0414]

This is situational, depending on your class and economic status, also country you are residing to. Difficulties in this levels may also be a factor in this problems. Sadly higher percentage of populations are having this problems, but with the help of different institution and good financial management can help everyone to back in their own track saving for their future

[Raflesia]

Sometimes people like this also have a big worry about borrowing but it's not that they can't repay the loan but that they can't get the loan back after they've paid off the debt.

I've seen this situation in my neighborhood when someone who works for a bank came to people's homes to survey and collect the last few months' payments from customers who took out loans.

They try to re-offer loans on the grounds that when closing and not borrowing again then future borrowing will be complicated but this is precisely what makes conditions more complicated where ordinary people are still not too aware that in the end we have to stop activities like this so that our economic conditions become better but with the fear that they cannot borrow money again at the bank, this becomes a very difficult thing for customers to avoid.

As far as I know, when we succeed to repay our loan on the banks, it must be easier to get a new loan because we have a good history in borrowing money. Why it will be difficult to get a new loan? Banks must try and try again to get the customers, surely they will persuade us to have a new loan. Even, the banks ensure us with some benefits if we want to have a new loan. They will make is easier in processing the new loan. This is what I experienced for borrowing money on the banks.

It is not a surprising thing if we see some bank employees come to people's homes. In the villages, it is something usual because they can easily get the customers in this way. The bank employees get some money if they succeed to get customers. The banks sometimes set a target for their marketing, they must have certain number of customers in a year.

CMIIW

It happens when we immediately make a new application in a loan when we have paid off the previous loan but if the loan is made in a certain interval (stop first) after the previous debt is paid off then it will still be a little difficult for a new application even if we already have a fairly good track record in a loan.
It happens where I live now but I don't know if it happens in other regions, countries or not because in the end policies like this seem to depend on where we live.

I once accompanied one of my family members to pay off a debt to a bank and the bank that applied for the loan said that it would be a little inconvenient if they did not re-borrow after the current debt was settled because the process could take longer. That might just be a trap to keep us in debt but in the end it happened because after my family stopped borrowing for a certain period of time and re-borrowed again to the bank, the process was a little longer than before.

[terrific]

This is situational, depending on your class and economic status, also country you are residing to. Difficulties in this levels may also be a factor in this problems. Sadly higher percentage of populations are having this problems, but with the help of different institution and good financial management can help everyone to back in their own track saving for their future

Having a good financial management will also come from your experience. If you are terrible in handling your money before.
Then, this time you'll be able to handle it properly because you don't want to have troubles again because life is hard nowadays.
Inflation is there and savings won't just be all about savings but it's about having something you prepare for and you ready to withdraw it any time in any situation that you'll be in.