Aims of the formation of savings in households
Classification of household savings is possible by the purposes of their formation, depending on which they can be subdivided into motivated and unmotivated. In turn, the motives of households (both conscious and sometimes unconscious) can be classified as follows:
• Accumulations aimed at meeting the needs of the consumer character of the second order (after the current ones);
• Reserve accumulations, i.e. money resources designed to ensure financial independence in case of unforeseen events;
• savings for future periods (health, education, etc.);
• Accumulation to maintain social status after retirement.
As for unmotivated savings, they can be divided into forced and irrational savings.
Forced savings , in turn, are divided into the following types:
• Accumulations formed as a result of the discrepancy between supply and demand. This imbalance leads to the emergence of a shortage of goods and services, which ultimately results in the emergence of a whole set of unfavorable socio-economic factors; when the forced accumulation reaches especially high values, there is an increase in prices;
• savings due to the fact that their surplus often results from a rapid increase in income, when opportunities for expanding consumption have not yet led to new needs;
• Accumulations intended for investment are a special type of savings, the main purpose of which is to invest in income-producing assets. Accumulations of this type accumulate in excess of those necessary amounts of accumulation, which are used for consumer purposes. The accumulation data can be short- and long-term. Short-term savings go to the money market or the market of short-term obligations. Long-term savings represent a source of financial resources in the capital markets, or long-term assets. One way or another, this type of household accumulation is an important source of capital formation if we take into account their urgency, relative predictability and stable inflows under appropriate conditions.
Irrational accumulation , arising under the influence of internal motives, can take the form of both cash and non-cash reserves. With the growth of monetary accumulation of individual farms, the accumulation of reserve accumulation in rented assets takes place and the share of the former is constantly decreasing. But if the motives for the profitability of accumulation diminish and their sizes begin to decline, then at the same time there is an inverse process of converting rental savings into reserve accumulations.
The division of savings into cash and non-cash parts is in direct proportion to their magnitude. The smaller the accumulation amount, the more likely its cash form. With the increase in the amount of reserve accumulation, the specific weight of their non-cash form grows, and at the same time the process of converting them into rental accumulation takes place.
The accumulation goals are diverse, but a special place in the increase of savings is occupied by those that affect the educational status of the population, influence the level of knowledge and education in society.
It should be noted that consumption and accumulation are influenced by factors not directly related to revenue generation, but reflecting the economic needs of the drives. Among this group of factors, it is necessary to identify the most important factors that directly affect the accumulative behavior of households.
1. Wealth. This is the accumulated property and financial assets. The higher the wealth, the lower the incentive to increase it; accumulation.
2. Price level. Increase in prices reduces the share of income going to consumption, the real value of some types of wealth and increases accumulation and vice versa.
3. Household expectations , related to future earnings , prices, availability of goods. For example, inflation expectations increase consumption.
4. Debt of households. With high indebtedness, households will reduce consumption and vice versa.
5. Taxation. The growth of taxes causes a drop in income, and therefore, a decrease in consumption and accumulation.
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