On Saturday, banks across the country will mark World Thrift Day with the usual round of gift vouchers, children's passbooks and cheerful advertisements. The day has a respectable pedigree. It was declared at the first International Savings Bank Congress in Milan in 1924, when Europe was still counting the cost of war and ordinary families had learnt, painfully, that a little money put aside could separate hardship from ruin. A century later, that lesson has rarely felt more relevant to Sri Lanka.

By most accounts, the country is out of the worst of its crisis. Growth has returned, and the Central Bank describes the financial system as stable. Beneath those reassuring numbers, however, household budgets tell a less comforting story. Research led by Professor Wasantha Athukorala of the University of Peradeniya found that outstanding personal loans rose from Rs 1,815 billion in December 2024 to Rs 2,450 billion by March 2026, an increase of 35 per cent. Over the same period, pawning advances climbed from Rs 660 billion to more than Rs 1 trillion. Loans for consumer durables, meanwhile, more than tripled, while borrowing for education fell by almost 60 per cent.

Those figures should give us pause. A Nation that borrows more for television sets and less for its children's schooling is not investing in its future; rather, it is mortgaging it. Moreover, the Central Bank's own Financial Stability Review, released this month, warns that rapid growth in household lending, particularly vehicle financing and gold-backed loans, is creating potential vulnerabilities. Household credit grew by 25.4 per cent year on year in the second quarter, compared with 14.8 per cent a year earlier.

Of course, it would be unfair to lecture families who pawn their jewellery to pay school fees or buy medicine. For many, this is not recklessness but survival. A UNDP study, reported in these pages, found that 38.5 per cent of households carried debt, and that nearly one in five borrowed to cover basic needs such as daily consumption, transport or medical care. Thrift is hard to preach to people with nothing left at the end of the month. Therefore, if World Thrift Day is to mean anything here, the responsibility cannot rest on households alone.

So how can Sri Lanka apply the spirit of the day? First, families who can save should start small and stay consistent. An emergency fund, however modest, is what keeps a sudden hospital bill from becoming a trip to the pawn counter. Equally, the habit is best formed early, which is why financial literacy deserves a firm place in the school curriculum rather than an occasional poster competition.

Second, banks must do more than hand out gifts in October. Many Sri Lankans, from daily-wage workers to farmers, fishers and small traders, earn irregular incomes. They need savings products that accept small and uneven deposits, carry low fees and pay a return that at least keeps pace with prices. At present, gold is often the only savings instrument a poor household trusts, and the pawn counter is its only bank. That should trouble a financial sector which prides itself on its reach.

Third, the State must protect the savings people do manage to build. This week, the Central Bank declared 27 companies, apps and organisations to be prohibited schemes under the Banking Act. Each one represents money that ordinary people hoped would grow and instead watched disappear. Enforcement must therefore be swift and public, backed by sustained awareness campaigns in Sinhala and Tamil rather than a notice on a website. Likewise, the long-discussed regulation of microfinance lenders, whose practices have trapped many rural women in cycles of debt, cannot be postponed indefinitely.

Fourth, we should rediscover what we already know. Long before modern banking, Sri Lankan villages relied on thrift and credit cooperatives and seettu circles. Built on trust and local knowledge, these institutions can still reach people whom branches and apps do not. With proper oversight, they could again become the first rung on the ladder of financial security.

Finally, thrift is a lesson for Governments as much as for citizens. A State that urges its people to save while spending carelessly itself will not be taken seriously. In the end, prudent public finances and stable prices are what make private saving worthwhile.

World Thrift Day will pass quickly, as such days do. Nevertheless, the question it raises will remain. Sri Lanka has learnt, at great cost, what happens when a country lives beyond its means. It would be a tragedy if households were now left to repeat that mistake on a smaller scale, one gold chain at a time.