how are spending and saving habits formed? does culture play any role in the formation of such habits?

Dear Student,
People save so that they can consume more in the future. A decision to spend now or save is really a choice of when to spend – now or in the future. The decision depends on wealth, disposable income, real interest rates and tastes or preferences for spending now or later. People have different behaviour towards savings and disparities in income levels. There are people who believe that money obtained today must be used to meet present needs and the future will care for itself. There are others who also hold the view that no matter how little one’s income is there is the need to save part of that income. 

Saving and spending habits are normally formed culturally since our childhood because we always follow our elders and ancestors. So, yes, culture play vital role in the formation of such habits.


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