Whenever we talk about savings, people think we talk about personal savings accounts and other personal financial ways of saving. But sometimes the idea of saving money as a group comes to mind. We want to make savings with our family members, friends, and colleagues. Everyone wants to make saving money as a group but they don’t have a proper plan for it. In this post, I tell how to make saving money as a group, what are the benefits of saving as a group, and why you make saving as a group.
Why do we make savings as a group?
There are many reasons behind saving money as a group. When you save money individually, this account gives you more interest and you grow slowly. But saving money as a group gives you high interest and you grow fastly. When you make saving with other people, it will help you keep saving with them and this is more beneficial when you are all saving money for the same purpose like investment, maybe for a special occasion and event, etc.
What are the kinds of group savings?
We see why we make group savings and now we look at the kinds of group savings.
Savings with family and friends:
Generally, lots of people make savings with friends for the pool, for the holiday trip, to buy a specific thing, for the birthday party of a friend or family member for health improvement, etc. This type of savings is not formal savings. You can make saving with proper contributions and when you have the money you can add. There is no formal agreement between the friends and other family members.
The person who has enough source of income, adds a good amount to the saving account and the person who has no pepper way of good income may contribute a lower amount to savings accounts. In this group, everyone knows how much money is expected from them and what are their savings goals.
Hobby groups:
Hobby groups or interest groups can give more benefits to the members which are included in this. The hobbyist groups will be the savings accounts and you can get access directly to the cashier. The benefits of getting access are that you can do a meeting with the members and discuss the financial condition and also about where are the funds used.
When we make savings in a hobby group, everyone can give an opinion about the financial condition of the group. When your group is new, then it is hard for you to set this properly. You should contact your financial advisor and ask him which i=bank is best for this type of savings. It is good for you.
Investment groups:
If you want to invest, you can invest only when you have enough amount of capital. The very simple thing is that the savings groups allow you when you make saving in groups. Because in some you cannot invest alone because you do have not enough money for this.
It is essential and good for you to hire a financial advisor when you want to invest with other people. It is a professional step because money investment is so sensitive. Everyone should be aware of the risks and all the possibilities.
Tendas and ROSCAs;
Tendas and ROSCAs are the types of saving accounts. They are old types of saving accounts but very few people know about them. ROSCAs stand for the Rotating Saving and Credit Association. The ROSCAs savings accounts are used by people who know each other very well. And Tenda savings accounts are used in South America. ROSCAs charge zero interest rates to the members of savings accounts. Everyone who is part of this saving account is added a fixed amount every month. And every month one member of the group takes a pot of money.
ROSCAs are useful to use but only for a few members. Because if a lot of members are included in this then you wait for a long time for your pot of money.
Savings with unknown persons:
I know this is less know the thing that you make a group with strangers but it is the kind of saving account. But some people can also make groups with strangers for the saving purpose. Some people think this is very risky or some want to take more control of savings accounts. You should take advice from a professional when you make a group with a stranger.
Also, read this Why Savings Are Important?
What are the risks of savings accounts?
Generally, group accounts consist of a few members who have access to the bank savings accounts and can change the statement of the bank. But sometimes the nap decisions are taken by the p[erson who has the authority to access the saving account. So, make groups with trusty people.
This becomes dangerous when you have no official contract with your family and friends. Because no formal agreement, a family or your friends may take advantage of it. You should be avoided this. And do it formally. The main problem which arises is that friends or family members can take money easily in an urgent situation.
How much you can save money as a group?
Saving money as a group is good but you need to know that you put enough savings which are affordable for you. Before savings, you should look at your budget. Before making savings set how much you need to save and also the timeline for this.
Benefits of saving money as a group:
There are many advantages of saving money as a group. Some of them are given below:
- It will be a good road for you to achieve your long-term goals.
- It will provide life insurance coverage to your family for financial security.
- You can get a good amount of interest from group saving as compared to individual saving accounts.
- The risk will be shared among all the members of any scam that will happen in the future.
Conclusions:
In this post, you see the benefits of saving money as a group and its importance also. Group savings is a good chance for you, to raise your worth and you can achieve your long-term goal. However, to do this you need to keep a deep eye on all the things. You should know about all the risks which you may face in savings accounts.
FAQs:
Q: Why saving money as a group is important?
But saving money as a group gives you high interest and you grow fastly. When you make saving with other people, it will help you keep saving with them and this is more beneficial when you are all saving money for the same purpose like investment, maybe for a special occasion and event, etc.
Q: What are the benefits of saving money as a group?
It will be a good road for you to achieve your long-term goals. It will provide life insurance coverage to your family for financial security. You can get a good amount of interest from a group saving as compared to individual saving accounts. The risk will be shared among all the members of any scam that will happen in the future.
