Desire to Save

By: Duddy Roesmara D and Nurul Chotimah

We know that people have a livelihood to get income. From this income, they can spend for consumption.Not all of the income will be consumed at the same time they get income so we have current consumption and future consumption. We call the future consumption as “savings”.  Because of uncertainty, people should have savings. In other word, there is a desire to save. Meanwhile, some people feel difficult to realize it. There are some problems in realization process. There are some simple dialogues that describe the problem of desire to save.

The first example is about salary payment.  Someday, we would pay salary for this month to our servant but she said, “Please, keep my money and you can give me three month later because if I put it at home, my husband will take for his goals without my permission. I want to spend it for my children”.

The second example is about down payment in purchasing. Someday, our neighbor would buy three boxes of instant noodle for celebrating her husband death. She paid money for down payment and got instant noodles but she won’t to bring it to her home. If her boy knew that she had bought it, he would to give enough money as his promise.

The third example is about application for a loan. My friend asked me how if she applied a loan than invested it to the time deposit at the same bank. I think this is a strange and irrational idea because of negative spread of interest margin. Based on her explanation, I conclude that she want to force herself to save her money. As consequence of loan, she must provide money every month for repaying the loan. By the end period of loan, she gets money from time deposit as her saving.

The first and second dialogues show that the problem comes from others but the third dialogue shows that the problem comes from their self. The most of people have a high willingness to pay or high marginal propensity to consume (close to one). In Javanese language, it is called “kanthong bolong”. Generally, the higher income tends to the higher marginal propensity to save. To realize savings need discipline and strong commitment.

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