If a person properly uses an electronic wallet to manage their finances, it is possible that at the end of a certain period of time (for example, monthly), they have additional money available.
When a person manages his money informally, he does it at home by his own methods. Without the support of a professional financial educator, or access to a financial institution, it's easy to lose that money, spend it unnecessarily, or generally in a way that doesn't respond to your goals or objectives.
While, formally keeping money in a financial institution provides important opportunities to achieve financial independence, since a person can change their lifestyle and improve their living conditions just by opening and properly managing an account in a financial institution .
Saving is measured according to the amount of money that is set aside, not spent, or invested in any purchase for a certain time; It does not matter if it is long or short term, and to do so, you must take into account
account some things like:
- The value of savings
- The time or period of saving
- The place where you save, the product with which you save
- Access to other additional financial products and services
The value of savings:
The value of savings is generally measured by the amount of money saved. It can also take the form of jewelry or real estate, for example. These different types of value are important, but clearly different. Money in cash or deposited in a financial institution has much more liquidity (availability and
ability to be transferred to another person) than money invested in jewelry or real estate, which can be difficult to sell or transfer to become currency. In addition, the value that money acquires, a jewel or another good, can vary in different ways over time.
The time or period of savings:
The time during which you save can be from days to years. Likewise, there is savings in formal and defined terms with fixed and pre-established expiration dates, or it can take the form of a date established by the budget prepared at home.
In many financial institutions, savings can be kept for a fixed time, and in this way the institution generally offers greater benefits (for example, with a certificate of deposit term
Fixed savings typically earn a higher interest rate than a regular savings account). While, informally, everyone establishes a period during which they will not spend all their money to save.
As already mentioned in the budgeting chapter, there is a difference between short-term financial goals and long-term goals, and just like with goals, people can save in the short or long term.
The place where you save and the product with which you save:
The place where you save is another important aspect to take into account, since a person can save in a piggy bank at home, they can keep the money under the mattress, or they can save in a financial institution such as a bank or a cooperative.
There are many institutions that capture people's savings, and generally each institution has a variety of savings products that suit different savings needs.
The decision of where to save and with which product to do so not only affects the safety, availability and benefits of saving, but also influences people's saving habits. For example, money saved at home has some availability because it is so affordable, but that money is not safe and carries few additional benefits. However, when saving in a financial institution, the level of availability of the money varies depending on the savings product, from the highest availability (such as monetary or savings accounts) or to low availability (such as fixed terms and savings programmed).
Access to other additional financial products and services
For the most part, savings products bring with them other financial products and/or services with which money (cash flow) can be managed and monitored, such as passbooks, debit cards, checkbooks, account statements, online services and mobile applications.
In addition, when a person becomes an account holder, the financial institution opens the doors to many other financial products and services that can help improve their financial future, such as loans and insurance.