The Relationship between Saving and Debt in Polish Households
The Relationship between Saving and Debt in Polish Households

Author(s): Anna Magdalena Korzeniowska, Wojciech Misterek
Subject(s): Socio-Economic Research
Published by: Masarykova univerzita nakladatelství
Keywords: personal finance; credit instruments; saving level;
Summary/Abstract: It can be assumed that having saving and credit is mutually incompatible, because the logics requires paying down of any debt if one has financial surpluses. This is because the cost of servicing debt is much higher than the benefits of interest on saving. As the observation of real household behaviour proves the opposite, the aim of this paper is to analyse the relationship between saving and debt of households, which is illustrated by the case of citizens of Lubelskie Voivodeship (Poland). The research conducted on a group of 223 working representatives of households shows that more than 50% of persons with bank loans also have saving that exceeds in its amount a 3-month income of a respondent. It is worth noting, however, that among persons assessing their financial situation as good or very good, the percentage of such persons is higher than in the case of people assessing their financial situation as bad or rather bad. In the latter group, many more people are holding only credit products. The research has also shown that people with saving are more likely to use car loans and credit cards, while people who do not save are more likely to use cash credits and cash loans. In both groups, the percentage of people with mortgages is comparable.

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