World Savings Day on Oct 31: Setting aside 20% of income first, under the 50-30-20 rule

In today's fast-moving world of spending, saving is no longer just a word. It has become the biggest weapon for everyone's secure future. To remind people of this, World Savings Day is observed across the world on October 31 every year.

The aim of the day is to raise awareness about money management, the habit of saving and financial literacy. Earning money is not enough. To be financially strong, it is just as important to plan that money well and save it.

The benefit of saving is not limited to an individual. It is considered the backbone of any country's economic progress. When people deposit money in banks or other safe financial schemes, that money goes into the development of the country's infrastructure, businesses and industries. In this way, personal savings contribute to national development both directly and indirectly.

The tradition of observing the day is more than a hundred years old. It officially began in 1924, when the first International Savings Bank Congress was held in Milan, Italy. On its last day, Italian professor Filippo Ravizza proposed observing the day. Representatives of 29 countries liked the idea, and since then the day has been observed to encourage people to build the habit of depositing money in banks.

The economies of many countries were devastated after the First and Second World Wars. The day helped restore people's trust in the banking system and make them understand the importance of saving. Today, in most countries, banks, financial institutions, schools and colleges hold special programmes on the day and offer guidance on saving.

In the age of credit cards, online shopping and Buy Now Pay Later (BNPL), people's needs and wants have grown considerably. This has made it difficult to spend thoughtfully and set aside a fixed sum every month. Even so, savings remain the biggest shield against sudden troubles in life.

Whether it is a job loss, a sudden medical emergency or any other crisis, an emergency fund should hold enough to cover at least 3 to 6 months of expenses. For big goals such as a child's higher education, buying a home or a comfortable life after retirement, it is necessary to save with discipline from a young age. A person with enough savings does not panic in a financial crisis. Savings bring financial freedom and freedom from worry about the future.

Those who want to save but do not know where to begin can try the well-known 50-30-20 rule of personal finance. Under it, 50% of monthly income goes on household expenses, groceries, electricity bills and other essentials. 30% can be spent on personal choices, outings, films or hobbies. And at least 20% every month should be set aside at the start and invested or kept in a safe place.

The lesson of World Savings Day is that instead of saving what is left over, one should save first and then spend the rest. Savings begun with small steps today will grow into a great banyan tree and shade you and your family.