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Saving habits in rural india

Updated on 20 February 2021
Bcom Exam Guide
6 min read 35 views
Updated on 20 February 2021

Saving is one of the good habits to inculcate. Everybody tend to save money because nobody is capable of depicting the future. Saving is an important aspect of Indian households as people tend to spend more than save. Saving money helps people in having a stable financial position. You can develop a habit of saving by controlling monthly expenses.

People of Rural India save less as compared to the people living in Urban India. People who live in urban areas possess certain jobs which have quite high salaries. Spending is directly proportional to saving i.e. if the spending is less, the savings will be more and vice – versa.

Savings can be used for investments. People invest their saved money in buying properties and gold so that in any case if any emergency emerges, they can sell any of these to retrieve their money. According to an online saving habits project, there are various ways by which you can save money. 

Elimination of Debt:

The first and the foremost thing you must undertake is to clear all your debts and loans taken from external forces like banks, businessmen or traders. Once the debt is cleared you can begin saving for the future needs.

Saving Goals:

Set up a goal that you wish to achieve within a specific period of time. Setting up such goals will help you to concentrate and you can achieve these goals way before time. Therefore, goals help in concentrating, focussing and achieving them.    

Utility Savings:

Utility savings are defined as the savings which can be used in cases of emergencies. People must invest in things which are available at a relatively lower price. If they will spend less, automatically the savings will be more. Therefore, people must ensure that utility savings are undertaken properly. 

People in rural areas save less as compared to the people living in urban areas. The people in villages do not have much income therefore; the savings are not possible as the spending rate is high. People spend more and save less. But there are certain reasons for low savings in rural India. Below is the table which will help you in having a fair view regarding average income and average savings. 







25 – 35

Rs. 81,231

Rs. 24,841



35 – 45

Rs. 58,219

Rs. 7,059



45 – 55

Rs. 66,492

Rs. 11,057



55 – 65

Rs. 86,198

Rs. 25,132



65 and above

Rs. 80,565

Rs. 8,625


This table clearly depicts how people are not able to save in rural India. However there are certain reasons as to why people cannot save enough for future needs.

Debt Clearance

Some people feel that they can clear their debts whenever they like. However, it’s not so. There is a specific time period within which one has to repay the money that has been taken. If the debts are not cleared, savings cannot happen. Therefore, to save one needs to spend less and clear the debts.  

Overuse of Credit Card

Some people feel that the credit card is the source of income. Credit Card is also a kind of debt taken by the banks to be further repaid with interest. Therefore, overuse of credit cards can be harmful.

No utility shopping

Some people keep on buying things which are not at all needed. These things might include electronic gadgets like mobile phones, washing machines etc. People have a habit of purchasing things which are recently launched in the market. This is the reason why there are no savings. People spend more than they save. Therefore, these can lead to instability in the financial position of an individual. 

No Budget

People do not make a budget list of their monthly expenses which can put them in a state of unstable financial position. Therefore, you must make a monthly budget list to know where you have made the majority of expenses. This list will help you in saving for the next month and for the forthcoming months.

There is a scope of saving habits of rural people. Saving helps in having a strong financial position. Majority of the rural people are farmers and they earn relatively less. But these rural people must save to be in a good financial position in case of some emergency. According

to a study of investment awareness and patterns of saving and investment by rural investors, there is a difference between savings and investment.





Saving is the income which is not used for consumption purposes.

Investment is the process of putting money in buying assets like land, properties etc.

Risk Factor

The risk factor is low in savings.

The risk factor is high in investments.

Returns on Investments/Savings

Return on Saving is low or negligible.

Return on Investment is high.

The above-mentioned table clears out the difference between savings and investments. Saving is necessary and so is the investment. Some people are confused between them. That is why people need to know the difference between savings and investments.

People in rural India save relatively less as compared to urban India. This solely depends upon their earnings. In rural areas, people earn less which results in low or negligible savings. However there are certain saving habit projects which depict why people save less and spend more. Through such projects people are able to have a better understanding of the average income and average savings of the rural sector. Thus, saving habits in rural India is quite neutral i.e. some people are able to save even in a small amount of money and some are not. 

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