As anyone over a year old should realise by now, life, though filled with many beautiful moments, is quite rough and not likely to dramatically (or permanently) improve in the future. One can never know what to expect with the ensuing weeks and months, more so with 100 percent certainty. Therefore, it is of utmost importance to save as much and as often as is possible, and in the Caribbean, it is no different. Savings today in this part of the world is combines a mixture of tradition and contemporary for most people. Here are three (3) of the more popular options:
1. Saving at home: Chances are your parents, their parents and their parents before them, and even you would have had an introduction to saving in this manner. Whether that would have meant collecting loose notes and coins to store in a used milk or coffee tin, stashing them away in a shoebox, or storing them under a mattress, these were the methods that were encouraged to promote a culture of saving within the family. Though this method comes with its obvious risks, such as the likelihood of complete loss in the event of a theft, flood or fire, it still remains a popular method of saving today. This is especially true for persons who want easy and ready access to cash, without the bureaucratic hassle, not to mention the frustration that comes with the loss of personal time and energy spent in waiting for the fund request to be processed, more so when engaging commercial financial entities.
2. Saving with a commercial bank: With the advent of infrastructural growth and societal development, those in charge of governance in the region, would have acknowledged that in order to attract a wider depth and scope of foreign investment, and also conduct external trade, while simultaneously making it easier for the citizenry to engage in financial trade, formal institutions had to be established and promoted as the eventual norm. Thanks to those pioneer efforts, today, commercial banks enjoy general, widespread support. They are usually seen as efficient, trustworthy, secure, transparent and accessible by their patrons. These account holders basically enter into an agreement with the bank of their choice, whereby their money is held (at a pre-determined cost at the bank's discretion), that can then be used to save, withdraw or transfer funds, while also generating a small, extra sum on that account (interest) for the account holder/s. In prior times, all such transactions had to be conducted in person (over the counter). Nowadays, technology such as credit cards, debit cards and e-banking have significantly improved business life.
3. Saving with a credit union: Yes, credit unions, just like commercial banks, are public financial institutions. Unlike banks that are exclusively accountable to their shareholders however, credit unions are accountable to each and every one of their members, who contributes by way of share savings, to the financial growth of the organisation. Likewise, in the case of banks, the sum total in one's account might prove to be insufficient collateral, where a loan is applied for, and therefore, additional collateral, such as other tangible saving accounts, land and property deeds, et cetera, might be needed to secure a loan. By contrast, the savings philosophy of credit unions allows for a loan to be applied for, (generally) based on the size of one's share savings. In a credit union, one can save in two parts: (i) a share savings account (compulsory); and (ii) a deposit account (optional). If a loan is applied for, one can use their share savings as collateral, especially where the loan is either the size of the amount of share savings, or in some cases, twice that amount. Credit unions in the Caribbean tend to be viewed as the 'poor man's bank' as in some cases, the requirements for borrowing are comparatively less cumbersome, although this point remains debatable in some quarters.
As you now realise, Caribbean people save in quite diverse ways. What's your preference?
Keywords: LinkedIn Local Caribbean, home, bank, credit union, saving