Thursday Nov 12, 2026
Thursday Nov 12, 2026
Friday, 30 October 2026 15:10 - - {{hitsCtrl.values.hits}}
By Madhuri Peiris
Every month, the salary arrives, the rent and groceries leave, and the loan instalment takes its share before anything can be set aside. For millions of families, saving is no longer a habit that is simple to practice. It is a habit that never gets started. As World Thrift Day arrives on 31 October, the old virtue of putting something aside deserves a fresh look, because the cost of borrowing has rarely mattered more.
Governments are feeling the same pressure on a far larger scale. At this month’s annual meetings in Bangkok, IMF chief Kristalina Georgieva urged countries to “make urgent repairs to the fiscal house before the cracks widen.” The Fund expects global public debt to pass 100 percent of world output by 2030, a level last reached just after the Second World War. Bond yields have climbed by roughly 110 basis points on average since late February, and because many advanced economies now refinance more debt at shorter maturities, higher rates reach public budgets faster than before. Worldwide, interest payments have grown from around 2 percent of GDP to nearly 3 percent over three years, leaving less for schools, roads and hospitals.
It is almost the same in Households. When debt is already heavy, every rise in interest rates bites harder. A government pays more to service its bonds, and a family pays more on its credit card, personal loan or variable rate mortgage. The scale differs. The squeeze does not.
Costly credit works quietly. A card balance charging high interest can grow faster than a saver’s deposit, so the money set aside earns little while the money owed earns the lender a great deal. Add the rising price of fuel, food and utilities, and the monthly budget has almost no room. Consider a family carrying a personal loan, a credit card and a vehicle lease. When rates rise, all three become heavier at once, and the first thing to go is the small monthly saving that once felt automatic.
People then start borrowing for ordinary expenses, and borrowing again to cover the repayments. The gap between what they earn and what they owe widens, and saving begins to feel like a luxury meant for someone else.
Small amounts matter more than most people think. Setting aside even a modest sum on payday, before spending begins, builds a buffer that stops the next emergency from becoming the next loan.
This is where technology is stepping in. Budgeting apps now sort spending into categories automatically and flag subscriptions nobody remembers signing up for. Debt repayment planners can show how much faster a balance disappears if extra money goes to the most expensive loan first, often called the avalanche method, or to the smallest balance first, known as the snowball method. Banks have added AI assistants that warn customers when an account is running low, suggest moving spare cash into savings, or round up purchases and quietly save the change.
These tools work because they make things easier. Most people do not fail at saving for lack of willpower. They fail because the system asks them to remember, calculate, and decide every single month, on top of everything else life demands. Automation lifts that burden and replaces it with consistency, which is exactly what good money habits need.
Still, a recommendation is only as good as the person reading it. An app may suggest merging several debts into one loan, and the monthly payment may look smaller. What it may not stress is that a longer repayment term can mean paying far more in total interest. A low introductory rate can come later. Fees, early settlement penalties and variable rates can change the real cost of a loan in ways a cheerful dashboard does not highlight.
Automated systems also work from the data they are fed. If income is irregular or spending is unusual, a plan built on averages may simply fail. Some tools are funded by the banks and lenders whose products they recommend, so a suggestion can carry a commercial interest. And an app that moves money automatically can leave an account short, triggering overdraft charges that wipe out the savings it was meant to create.
Three ideas are worth understanding before accepting any advice. First, the interest rate, and whether it is fixed or variable. Second, the repayment term, because time itself is a cost. Third, the total amount repayable, which is the true measure of what a loan really costs. If a tool cannot make these clear, or if you cannot explain them back in your own words, pause before you agree.
Thrift has never been about deprivation. It is about choosing deliberately. A sensible approach today blends both worlds. Let technology handle the tracking, the reminders and the sorting, but keep the decisions human. Read the terms. Compare offers. Ask the bank to explain anything unclear. Build a small emergency fund first, then go after the costliest debt, and avoid new borrowing for things that can wait.
The IMF’s message to governments is that delay makes repair harder and more expensive. The same is true at home. The best time to deal with debt was yesterday, and the next best time is before the next rate rise arrives. On this World Thrift Day, the smartest financial move is not a clever app or a perfect algorithm. It is understanding what you owe, why you owe it, and what you intend to keep.
