Recent events have shown us how important saving is. The truth is, having access to a bunch of credits has made people spend more than they can afford. What you need is not always what you buy, as many times you just want to keep up the appearances and that costs a lot. And there are those who can barely make ends meet, living from one day to another.
Overspending is never good, everyone should have a safety blanket, just in case things go wrong. The pandemic caused economic hardship has shown how vulnerable we are.
Going dept free and having some savings is the dream of many. You can start saving while having debts, one does not always exclude the other. However, keeping your savings safe is a must and if you can invest your savings to earn more, even better.
Image by Merry Christmas from Pixabay
Old Times
The good old saving methods are not profitable anymore, compared to the new opportunities arising day by day. Grandpa went to the bank, deposited his savings, got his interest that he could capitalize, add to his deposit and earn interest on that too. Grandpa was happy, he knew his money is safe as bank robberies were not so common and his money made more money for him.
Modern Times
I go to the bank today, deposit my savings and after a year I get some pocket change. If I compare the buying power of my initial capital with the my new capital, accumulated after adding the interest earned to it, I realize i hold less than one year ago, even though the bank has given me some pocket money as a reward for letting them use my money. The best offer they have right now is an annual 2% for a two year deposit. That is far from what one would be looking for, let's be honest.
Cryptocurrencies have grown a lot lately. Over the last decade, more and more people are venturing into the crypto world. Bitcoin is not seen as a scam anymore and institutions are changing their orientation as well. Companies are joining in as well and the ball is rolling.
@cryptoandcoffee has just posted an article 20 minutes ago, about Payroll Crypto Services, about about a tech firm in the United States offering to pay a portion of their salaries into a crypto investment fund. I know a company in my country that's been paying a part of the salaries in BTC. I'm not sure how legal is that right now, but I would not be against it as an employee.
These measures are encouraging saving already. One who's getting a part of their salary in BTC for example, would think twice before converting into fiat and spending it. Obviously they need to cover living costs, but getting crypto is already a saving measure made for you and instead of keeping you money in the bank, getting nothing, your crypto is appreciating in time.
Countries with crashing economies have already pushed people into investing in crypto and also giving citizens no other option but to earn online as content creators.
CBDC
CBDC, or Central Bank Digital Currency is another big push towards crypto. Regardless of what governments say about the necessity of transitioning from cash to digital currency, the goal is to obtain total control over finances. Once the system is implemented, it's going to be even more difficult for one to keep their anonymity.
CBDC could impact traditional banks’ business model, strategy and operations. There has been voices about this, it's still not clear how it's going to work.
The good news is we still have a few years till that happens as none of the countries is close to the finish line. We still have time to accumulate some crypto stake.
Banks are pushing people towards investing in crypto. Institutions are also investing in crypto massively, which may be an encouraging sign for the undecided and skeptics.
Statistics about savings will look very different in a few years. A good part of those who were used to max out every credit card they had will no longer do that as investing in crypto will be more appealing. This is a process though, will not happen overnight, but we're getting there.