Developing economies, like Kenya, are ranked lowest on saving culture. Most of the income of an average household is spent on consumption. However, developing a saving culture is important.
It helps you build a safety net for life’s uncertain events. It could be a major family illness, an accident that needs more than you had planned to spend, or a rise in rent. Setting money aside for such emergencies helps you remain assured. This is that feeling of security and peace of mind that comes when you know you have a savings account.
By saving you also get to feel independent. I believe this is more relatable to us women. Wouldn’t you wish to be able to fund your development ideas and any of your projects without borrowing and depending on others?
You may not say yes now but a saving culture will come in handy when you’re in need of financial backup. What will you do when your monthly salary is no longer on the table? And when times are tough in business? Having some savings set aside can be the difference between eviction and having to beg family or a friend to take you in.
Saving should be a part of your future goals too. One, it can increase your net worth. Savings put in high yield interest earning accounts increase the net worth of an individual. This is passive income that can be used to boost wealth depending on the amounts saved.
Two, retired people who cultivated a saving culture have less to worry about as they do have some cash set aside. This takes care of their daily bills and medical visits that, unfortunately, increase with age. When you save, you won’t have to over-burden your kids in your retirement years.
To enjoy these benefits, you need to put aside small amounts of money over a long time. Is it that hard? Not if you follow my steps:
1. Set achievable goals
Start small and build on what you have. If you can afford sh.1000 per month, start with that. Do not be over-ambitious. This will see you fail at it and eventually give up on the idea altogether.
Several initiatives have been started by personal finance experts to help you develop a saving culture. Like this one. However many people fail to see any of them through. Why? Mainly, because they are working with other people’s income levels or savings capabilities. Always choose what works for you.
If a savings challenge encourages saving sh.1000 per week and you can only afford sh.200 per week, challenge yourself to do your sh.200. Do not flank out too just because the set target is way beyond your reach.
2. Reward yourself for reaching small milestones
When you show progress towards a saving goal goal, make sure to reward yourself for a job well done. Take sh.500 and buy those headphones you have admired for a while. Do something that pats your back and makes you aware that so far you are progressing amazingly.
3. Automate your savings
Make it a habit by putting up ways to automatically save certain amounts. Consult your bank over such facilities. Most banks have no charges on standing order instructions to saving accounts, take advantage of this facility.
4. Look for high yield accounts
Scout for savings accounts that will give you a high return, as opposed to having your money sit in a bank account earning zero interest. Conduct your research on saving accounts. You could seek information from different banks, and explore the possibility of saving with unit trusts. Your choice will depend on your risk appetite.
5. Make it a challenge not a chore
Make saving a fun thing to do. A fun challenge is the #52weekchallenge. Doing things like these in a group, or with your friends, also give you motivation and support to keep going. However, always choose whatever works for you best. Get in a comfortable zone and challenge yourself to do your best.0