Economics·Spending, saving & borrowing · NSSCO 4.3
Spending, saving & borrowing
Narrated lesson · press play
Once money is earned, a person can do three things with it: spend it, save it, or borrow against future income. This lesson shows why low-income and high-income households do these three things so differently — the poorer family spends almost everything on necessities, while the richer family saves more and buys luxuries. We study the real motives behind spending, saving and borrowing, watch how these patterns change as income and a country develop, and finish with a simple percentage-of-income sum you can use in the exam. Real Namibian families, from a rural home to an urban salary earner, run all the way through.
What you'll learn in this lesson
By the end you should be able to (NSSCO Economics 4.3):
- Describe how and why different income groups have different expenditure patterns (spending, saving, borrowing)
- Analyse the different motives for spending, saving and borrowing
- Analyse and discuss changes in patterns of expenditure between groups and over a period of time
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