By Sofia Gancedo | Bricksave
October 21, 2024
News > Blog Article > Why does it cost so much …
In today's economic climate, many families worldwide are struggling to stretch their money until the end of the month. Saving can often feel like a luxury rather than a necessity. This difficulty isn't just about cutting back on luxuries or being thrifty—it's about the broader economic forces at play that make saving increasingly difficult. Understanding the reasons behind these challenges can help us navigate them more effectively and empower us to make more informed financial decisions.
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Savings habits vary significantly across the globe, influenced by cultural, economic, and social factors. In Mexico, for example, the savings rate is strikingly low—only about 21% of adults have a savings account, according to a study from the Mexican government. In Brazil this percentage is higher, though still below 50% of the population. This means almost 100.000 people in Brazil do not possess a savings account*. These low rates can be attributed to economic instability, high levels of informal employment, and limited access to banking services. The COVID-19 pandemic has helped these numbers, due to the increased need for financial services, but they are still fairly low compared to other regions of the world.
In contrast, over 70% of adults in East Asia and the Pacific region manage to save regularly. These regions benefit from more stable economies, higher levels of financial literacy, and cultural norms that prioritise savings. Europe and English-speaking America fall somewhere in between, with savings rates shaped by a mix of economic prosperity and challenges, as well as differing attitudes toward money management and future planning.
These contrasts highlight the complex interplay between individual financial behaviour and broader economic conditions. In regions where economic uncertainty prevails, saving can be particularly challenging, as people might prioritise immediate needs over long-term financial security. On the other hand, in more economically stable regions, saving is often integrated into daily life, supported by government policies and societal expectations.
Many people see saving as something to do only in case of emergencies—a 'rainy day' activity. This mindset often stems from a place of fear or scarcity, where saving is seen as a necessary evil rather than a positive financial habit. However, this negative perception can limit our ability to view saving as a tool for building a better future. Why not shift the focus to saving for brighter, sunnier days? By rethinking the purpose of saving, we can start to see it not just as a safety net, but as a way to achieve our goals and dreams.
Embracing financial discipline and setting aside money regularly can help build a cushion for future opportunities, rather than just safeguarding against potential crises. This shift in perspective can be powerful, turning saving from a chore into an empowering activity. When we save with intention, we create possibilities for ourselves—whether it's buying a home, starting a business, or simply having the freedom to pursue what we love without financial stress.
One of the best ways to grow your savings is through smart investments. Investing allows your money to work for you, generating returns that can help you build wealth over time. Thinking long-term and choosing conservative assets like real estate can protect your money from inflation and market volatility. Real estate, in particular, is a popular investment because it tends to appreciate over time and can provide a steady stream of income through rentals. It's an investment that offers both security and the potential for growth, making it an attractive option for those looking to build their savings.
Investing in tangible assets provides a sense of security and often yields steady returns over time. Unlike more volatile investments like stocks, which can fluctuate wildly in value, real estate offers a more stable, predictable return. Additionally, real estate investments can be a hedge against inflation, as property values and rents often increase over time, preserving and even enhancing your purchasing power.
The relationship between saving and investing is often seen as a cycle—saving allows you to invest, and wise investments, in turn, build your savings. This cycle is virtuous because it helps you grow your wealth over time while also providing a financial safety net. However, it can be challenging to start this cycle if you're struggling to save in the first place. This is where platforms like Bricksave come in, making real estate investment accessible to a wider audience. By allowing individuals to invest in real estate with relatively small amounts of money, these platforms offer a practical way to secure your financial future while growing your savings.
This approach democratizes investment opportunities, enabling more people to participate in wealth-building activities that were once out of reach. As more people engage in this cycle of saving and investing, they not only build their own financial security but also contribute to a more robust and resilient economy.
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Changing the way we think about saving can significantly impact our financial lives. By viewing savings not just as a safety net but as a stepping stone to greater financial stability, we can create a more secure and prosperous future. It's about shifting our mindset from one of scarcity to one of abundance—seeing saving not as a sacrifice, but as an investment in our future selves. With the right approach, saving doesn't have to cost so much; it can be a rewarding and empowering part of our financial journey.
*Based on the estimated 203.000.000 population from the 2022 Brazilian Census
Investing carries risks, including loss of capital and illiquidity. Please read our Risk Warning before investing.
