With some extra cash – the money left over after Tet – what are some ways to handle it and how does it impact the economy?
Spending money right away, what do you contribute to the economy?
From the perspective of behavioral economics, if you spend that money right away, according to Keynes, you are choosing to consume immediately and foregoing potential future income (could also be future loss).
From a macroeconomic perspective, consumption is part of GDP. Spending is a way to stimulate production and contribute to economic growth.
However, this may not necessarily be the option that many people choose at the current time.
In 2023, the global commodity market experienced many fluctuations and was influenced by the economic, political, and social context. According to PwC’s report on consumer spending habits in Vietnam in 2023, up to 62% of users chose to cut unnecessary expenses, with the corresponding figures being 72% in Southeast Asia and 69% globally.
What if you save the money?
Instead of spending it right away, if you choose to save your children’s lucky money in a savings account or a safe, you will face the risk of inflation.
Inflation reflects the decrease in purchasing power of a unit of currency. When general prices rise, a unit of currency will buy fewer goods and services than before. With that same lucky money, if you save it, by the end of the year, the amount of goods that can be purchased may have decreased.
What about saving deposits?
Savings deposits are still a reliable choice for many families, seen as a capital preservation channel in difficult economic times.
The latest findings from the Green Shoots Radar survey – a quarterly report focusing on consumer sentiment in the fields of financial services, commerce, tourism, and many other topics – show that despite the intention to spend more, most consumers expressed a desire to allocate a larger budget for savings. With savings accounting for 10% – 29% of monthly personal income, in Vietnam, 43% of surveyed users expect to accumulate more personal savings – a higher percentage than the regional average (36%).
To bring convenience to customers in financial transactions, Viettel Money has partnered with BAOVIET Bank, MB Bank, and Cake by VPBank to provide online savings products.
The savings products have a fixed term in VND for individual customers. Account holders can perform savings-related transactions including depositing money, checking interest rates, checking savings accounts, quickly and conveniently closing savings accounts with extremely preferential interest rates.
With simple steps, customers can easily deposit savings at BAOVIET Bank, MB Bank, and Cake by VPBank on the Viettel Money app with the following attractive features:
– Higher interest rates than counter rates;
– Diverse deposit terms;
– Easy, safe, anytime, anywhere money deposits
– Flexible account inquiries or closings
What about buying gold?
As a safe haven when other assets fluctuate, gold is a popular store of value compared to other commodities. Therefore, for those who dislike risk, saving money to buy gold is not a bad choice.
In 2023, the price of gold witnessed an upward trend. The increase in gold prices in 2023 can be explained by two main reasons: Uncertainties due to geopolitical tensions and inflation have raised the demand for safe havens among investors. Meanwhile, gold is an investment channel that is always considered to be highly safe.
What about investing in stocks?
According to a report by the State Securities Commission (SSC), the Vietnamese stock market in 2023 experienced many fluctuations and faced significant pressure from the complex developments of the international stock market.
However, according to the SSC, in 2023, the stock market continued to attract active participation from investors. As of the 11th month of 2023, the total number of securities accounts increased by 355,672 accounts compared to the end of 2022, bringing the total number of securities accounts to over 7.25 million accounts, equivalent to 7.3% of the population, exceeding the target of 5% of the population set by the Government in the Scheme for Restructuring the Securities and Insurance Market until 2020, with orientation to 2025.
In the context of record low interest rates and few alternative investment channels, experts believe that stocks remain an attractive investment channel, actively attracting capital inflows in 2024.
