The Purposes and Motivations of Savings Accumulation based on Generational Affiliation, Financial Education and Financial Literacy

Abstract

: In today's fast-paced world, we have had to learn that uncertainty is constant, and that we have to face it in unexpected situations. It is not only our income that is affected by uncertainty in the future, but also our jobs and our livelihoods, which, in many cases, depend on other factors. Global conflict situations only add to this sense of insecurity. In uncertain situations, the fundamental goal of individuals and organisations is to seek security through the means at their disposal. This is no different for our finances. Savings are a key element in the lives of individuals, households and businesses in managing such uncertainties. Savings have always been crucial at the level of the national economy as well, as they have been the source of investment according to classical economics. Nations with a high savings rate have always been able to invest more and have thus enjoyed greater economic growth. Savings, by their role as a store of wealth, help to deal with sudden and unexpected situations. Today, however, savings no longer have only a security function, but must be seen as a collateral for future consumption, a source of future consumption needs, a guarantee of maintaining the standard of living to which we have become accustomed. The current paper sets out to observe and examine the rationale behind savings accumulation from the point of view of households in the light of the pandemic. It is also an objective to identify the impact of the pandemic on the security function of savings formation, providing a picture of the motivations of different generations to save and make savings for the future, based on the results of a questionnaire survey conducted in Hungary.