Understanding the Context
The World Savings Day is commemorated every 31st of October since 1924 to encourage the habit of saving money and promote financial education. However, in Mexico, the challenge remains significant.
According to the latest National Inclusion Finance Survey (ENIF) by Condusef, only 66% of the adult population has some form of savings. This article, published in Condusef’s magazine “Protege Tu Dinero,” sheds light on this issue.
Half of Mexicans Still Save Informally
Although the number of people who claim to save has increased since 2012, when only 50.8% were saving, the majority still use informal mechanisms, meaning outside the financial system.
As per Condusef’s magazine, 41% of Mexicans keep money at home, while others resort to loans (20%), work or known colleagues’ boxes (13%), or even family and friends (9%) to safeguard their money.
Only a smaller portion uses formal means: 17% save through accounts or checks, 13% via salary, and a mere 3% invest or deposit at term.
Why Save in Mexico?
The use of savings also reflects a mix of immediate needs and personal goals:
In informal savings, 37% is allocated for personal expenses, and 32% is for emergencies.
In formal savings, emergencies take the lead (41%), followed by personal expenses (30%) and home improvements (22%).
Only 13% of Mexicans save for education, whether in formal or informal schemes.
These statistics indicate that while there is awareness of the need to prevent unforeseen events, long-term saving with investment objectives remains a minor practice.
Barriers to Saving: Low Incomes and Distrust
Key challenges Mexicans face in saving include:
- Insufficient incomes that limit the possibility of setting money aside.
- Unexpected expenses that force using savings prematurely.
- Distrust in banks or lack of knowledge about financial products.
- Lack of financial education, which prevents taking advantage of the returns or tax benefits of formal saving.
“First Save, Then Spend”: Basic Steps to Begin
Condusef proposes a practical guide for those looking to start generating their “savings stash”:
- Set a fixed amount every time you receive money, even if it’s just 10 or 50 pesos.
- Spend it on yourself, treat it as an obligatory payment.
- Make it a routine until it becomes automatic.
- Choose where to keep it, from basic or payroll accounts to investment funds or savings plans.
- Let it grow, by taking advantage of compound interest or yield-generating instruments.
Promoting saving not only strengthens personal finances but also the country’s economy. More people saving formally means more domestic investment, less reliance on informal credit, and greater resilience to economic crises.
Key Questions and Answers
- What is the World Savings Day? It’s an annual event on October 31st promoting saving habits and financial education since 1924.
