Current Event: Economic Concepts - Essay Example

Saving Saving Earning goes hand in hand with saving which is the key to economic growth and provides financial security tothe person saving. Savings are incomes not spent or can also be deferred consumption and it is done through putting the money in a bank or any other safe place.Michele Lerner wrote an article on saving where she discussed the savings plans for people living in the USA in the year 2014. The research that came up with the conclusions which guided the writer in writing the article was done by the American express (AXP).

From their research, 54% of all the adults that were surveyed in January 2014 had decided that saving was their number one priority throughout the year. The research also found out that 38% of the total population interviewed, had made budgets and were planning to stick on them which was an improvement as compared to the 23 % who had decided that in the previous year (Michele, 2014).However as much as the interviewed people wanted to improve on their savings, most of the respondents had not made any changes to the strategies of saving they used.

The respondents presented different strategies of saving that they were planning to use in the year in order to increase their savings. The research done compared the previous and current year and compiled the comparison. 53 % of people were planning to soak away more of their paycheck as compared to 51 % of the people who wanted to do the same in the previous year (Michele, 2014). The number of people who were planning to save at least part of their tax refunds was 26% and was equal on the two years compared.

There was a reduction on the number of people who wanted to cut back on luxuries in order to save with only 21% of the respondents planning to do this as compared to 23% in the previous year. 19% of the respondents were planning to play the lottery in hopes that they will win and save the money as opposed to 21% that opted for this method of saving the previous year. Another method of saving that was common in both years was selling of personal property and presented an equal percentage in both years (Michele, 2014).

Savings can be done in a number of ways as shown by the response of the interviewed persons. Their methods were good although some such as selling of personal property cannot be considered as saving since it just converting assets into money (Pollin, 1997). The increases shown in the percentages on the plans of saving indicated the appropriateness of the methods and it is predictable that those methods that showed an increase in percentage were more successful in the previous year. However, according to the research, the amounts of income that the respondents earned was influential to their saving since even some people did not save anything.

Saving and income are directly proportional are the level of income dictates the amount you save although other factors such as knowledge on saving and the saving plan implemented may also play a role in this (Gapinski, 1993). The graph presented below shows the relationship between saving and the income earned.In conclusion, saving is dependent on the level of income and the strategies that the person in context uses although it may be affected by the economic situation prevailing in the country.

ReferenceGapinski, J. H. (1993). The Economics of saving. Boston: Kluwer Academic.Michele ,L. (2014, March 13). Americans Money Plans for 2014: Save More -- and Spend More - DailyFinance. Retrieved April 5, 2014, from http://www.dailyfinance.com/on/americans-money-plans-2014-save-more-spend-more/Pollin, R. (1997). The macroeconomics of saving, finance, and investment. Ann Arbor: University of Michigan Press.