In the latest edition of the Financial Education Magazine of the National Bank of Romania, I write about savings, describing tried and tested principles in a period where consumerism is a mantra, just “a click away”, through instant credit – as it often appears- and marketing campaigns. The good thing is that, in the digital world, savings, investments or financial investments for the future are also “just a click away” to cover future consumption and guarantee future well-being.
No matter our actions and the choices we make everyday, these are decisions by which we allocate our resources both now and in the future. It’s a choice between consumption and wanting satisfaction in the moment and saving or investing and having greater satisfactions to look forward to. We flip between the desire to benefit now and the prospect of increased benefits later.
Saving isn’t just a simple accumulation of resources, a “white money for black days”, but it is the economic basis to build the necessary capital for production and development to benefit from increased consumption in the future, and for the “black days” to also be white. In this sense, saving cultivates values and behaviors, such as patience, caution, thoughtfulness and discipline.
Despite its many virtues saving has not always been seen well. For example, for J. M. Keynes, the creator of macroeconomics almost a century ago, saving was undermined by a “paradox” that overshadows its benefits, which were undeniable in all economic thought up to that time. With the “paradox of saving”, Keynes questioned the key role of saving in supporting investment and economic growth. And for this reason, saving deserves to make a come back despite rampant consumption today.
At an individual or family level, debt consumption is limited, for reasons such as the length of our active life, or legal and procedural norms. Yet we are witnessing a severe deterioration of behavior needed for public saving. By this I mean the situation of public finances, seen in high budget deficits and public debts, as an effect of expansionary budgetary policies promoted by the Keynesian theories. Starting from the second half of the twentieth century, public policies have reflected Keynesian macroeconomic thinking and a prevalence of political calculation, seen in the theory of public choice.
It’s rare (probably only by chance) that public finances have at the least been balanced or in the best case a surplus, in complete contradiction to the responsibility and financial discipline you need for saving. Budget deficit and public debt have become the new macroeconomic rule in almost every country.
Globally, gross government debt is approaching 100% of GDP mark. Not only in emerging and developing countries, such as China, but developed countries continue to have debt with the US debt having almost a third of global debt. The EU’s public debt has increased by about 15 percent in the last twenty years, to over 80% of GDP, even if the rise in EU has been more moderate, less than one percentage point annually. Romania however clocked the fastest increase in public debt among European Union members.
Faced with this, saving and economic responsibility need to be reinserted into public policies to achieve financial sustainability. When the shows it is responsible by delivering credible and sustainable public budgets, it sends a coherent message to the public and companies that favor financial discipline. Otherwise we fall into the insidious trap of economic populism and public policies resort to easy and short-term solutions, based on consumption and budget deficits, to the detriment of investment and macroeconomic balances.
A healthy society needs to make financial education a strategic objective, both in terms of teaching the right saving and investment behaviors, for individuals and businesses. Sound public policies, in line with the principles of the market economy and financial sustainability need to be promoted.
Thanks to technology, we are only “one click away” from consumer purchases. Financial education is indispensable for making correct decisions and managing savings and investment accounts. It’s not as spontaneous as technology but requires ongoing efforts.
Financial education is a commitment that the National Bank of Romania and the Romanian state are committed to, through something called the National Financial Education Strategy, which we also contribute through with editorials like this one, convinced that Romania’s development is based on a healthy economic thinking on all levels_ for the public and decision-makers whose job is to come up with sustainable public policies.
N.B. The images are snapshots from the exhibition Money Speaks to Us – A History of the Lion from Metal to Polymer, made by the Museum of the National Bank of Romania in collaboration with the State Mint and the NBR Printing House. The exhibition free and open from February 10 to May 6, 2026. (Photo: Teona Giugariu)
