What is a common long-term source of finance for households?

Savings are a common long-term source of finance for households because they represent money that has been set aside and accumulated over time, often through regular deposits into a savings account or investments. This accumulation allows households to plan for significant future expenditures, such as purchasing a home, financing education, or preparing for retirement. Savings provide financial security and the ability to manage larger financial commitments, making them a sustainable and reliable source of funding.

In contrast, short-term loans are designed for immediate financial needs and typically have to be repaid in a short period, making them unsuitable for long-term financing. Similarly, credit cards often carry high-interest rates and are usually considered a revolving form of credit rather than a genuine source of long-term finance. Government grants, while beneficial, are not a regular source of funding for households and are often restricted to specific purposes or eligibility criteria, rather than being a consistent financial strategy.