CHAPTER ONE

1.1   BACKGROUND OF THE STUDY

Savings, whether sector saving, private sector enterprises saving or household are influenced by multiplicity of macro -economic variable in particular household. Savings are influenced and determined by the level of income. The accepted minimum living standard, inflationary expectations, taxation, the level of interest rates and not a least by confidence in the saving system. Other factors that may influence the size of household savings are the availability and potentials of savings instrument, their merits and demerits and inducement to potential saver.

It is problematic estimating what subject should be given to each of the variable or established any firm generalization about the savings habit.

Nevertheless, it is clear that the relationship between the level of interest rates and financial institutions and instruments on the other hand, and the savers and users of savings on the other hand are very crucial.

For individual or household saving can be defined as that disposable income which is not spent on consumption.  For the nation at large, the definition of savings is slightly more complex. It would not be correct to simply. Subtract consumer expenditure form national income arid call the remainder saving because this would make no allowance for the collective consumption represented in the public authorizes expenditure on goods and services.

Saving habit can be defined as the saving habit of an individual as the usual behaviour of saving money or disposable income which is spent on investment for future used. Most especially during old age (retirement purpose business formation, security purpose e.t.c saving habit has become a reaction of an individuals objectives, a desire of possession in life.

In fact saving habit accrues more benefit to the individual than to the overall economy. It is critical to households both in developing and developed countries. This is because savings smoothen consumption in the face of volatile income. As stores of resources, savings are useful for wide range of purpose. Without it income shock could leaves permanents scare on households. There are some life — events that require planning’s and savings in Nigeria, individuals often do not seems to understand how or why they should save a greater amount of low income groups and those in the formal sector of the economy have no saving at all.

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