I quite like this post from Time Magazine

Remember when the economic crisis taught us the importance of saving some of our money for a rainy day? That’s a lesson the microfinance community is increasingly warming up to, too. I wrote a piece about the shift—emphasizing savings, not just lending—last summer, but I’m mentioning it again today because the Gates Foundation has announced that it will give $38 million in grants to organizations trying to figure out cost-efficient ways to drum up savings in poorer parts of the world.

Now, anyone who thinks that being poor is synonymous with not saving needs to read this book. Poor people do save and plan for the future—but cows aren’t a particularly liquid asset and an informal, community-based insurance scheme doesn’t work too well if catastrophe strikes an entire village.

The historical problem with expanding savings account within developing countries has been the cost of maintaining such accounts—since balances are low, it often doesn’t make good business sense. The Gates money is partly meant to help figure out ways to bring down costs by using technology such as mobile phones for deposit-taking.

And that’s where I think we all might learn something. Consider this recent study which found that people in the Philippines, Peru and Bolivia saved an average 6% more when they received cell-phone reminders about financial goals they’d already committed to. The economists who ran that study figured the process could easily be imported to places like the U.S. When those Gates-funded microfinanciers figure out how to get people in developing countries to save more cash money, I want to hear about it.

I am of the opinion like perhaps a lot of people that introducing huge amounts of money in fragile countries/economies is perhaps not the best thing to do. For savings to really flourish they need to be organic, and money only put into them once some form of stability can be established.

This also transcends through to your average ‘Joe’ savings. As constantly I write about the struggles I have to try and save the smallest amount of money and the one thing I have learned and am currently learning is that to be able to save you need to approach it with stability. There is nothing worse than making a decision and putting money aside without thinking about it .