By George Bakiwanya
Is it right to save money when you have burning needs?
A number of people have confronted me with this hot topic. The answer is within the question, though you need to reap it with cognate facts
While saving seems difficult, it keeps you poised to repulse future financial catastrophes
So, even if your needs are burning like hell, it’s important to squeeze your expenditures and put a small percentage of your income aside to meet future needs
However “never bury your head in the sand” If you have due debts first pay them off to avoid sinking into interest charges or undesired legal penalties
Saving is a plain sailing if you have budget and clear goals
Benefits of saving
- It makes a dream come true. The truth is, many people would like to have a blast, enjoy a precious vacation time, wedding , marriage anniversaries, posh rides, “booze cruise” etc.
Unfortunately, all this may not unfold if you did not put some money aside for them
Saving keeps you optimistic and assured that one time you will see light of the day
Don’t wait for the best days of your life to come then start saving, It’s the little you choose to start saving today that may turn around your life
- It leads to Investment. While many people stress investment in connection with stock markets, mutual fund, digital currency and network marketing, I like to shine a light on investment in;-
- a) Education. Today we have the “hot cake courses” M&E, CPA, CIPS, CCNA” etc. Such professional courses can turn the tide
Polishing your skills enables you switch to a high-value employment chain, hence doubling your earnings.
b) It is true, you may not own enough land to draw on commercial farming, however, using your average savings it’s possible to hire land in an ideal location and break new grounds to double your earnings in agriculture.
3. Saving helps prepare for retirement. Many people flock receptions of their former workplaces to seek financial help after their retirement
To avoid such off-key moments, it’s important to create a retirement fund to help you live a decent retirement
Much as there is mandatory NSSF saving scheme, those funds may not be enough to meet all your post-retirement needs, hence it’s vital to have a supplementary saving basket.
How much do you need to save per month for your retirement? I don’t have a direct answer to this question
The percentage may vary depending on your expected retirement age, retirement goal, your total monthly income and how much you have so far saved
- Saving cushions emergencies. These are unexpected events that require immediate action, for instance, medical complication, loss of a job, accidents etc.
If you’re caught penniless, such awful situations may slam you into impulse borrowing and gets you soaked into the heavy debts burden
An easier way to motivate yourself to save is by thinking of unpretty possibilities, for Instance “If you lost your business or job today, for how long can your feet keep on the ground?”
“I didn’t see it coming” is not a solution, saving is the way out
- It gives peace of mind. I’m sure you heard of a saying “If you save money today money will save you tomorrow”
Nothing feels good like knowing you have some money that can help you deal with the “curve balls” thrown at you
Without money you may not find the courage to walk away from exploitation or drama because you’re low on resources to make a new start
But with your safety net, it’s easier to tap into your funds anytime and compose yourself.
How can you ease saving?
- Have a budget. I guess you ever heard of a phrase “don’t spend more than you earn” the essence of this is to spur you to have surplus funds to save
However, many times if you don’t have a budget you may unconsciously spend above your earnings
Therefore, a budget helps you apportion your expenditure against income
This does not only enable you gain control over your money, it also makes saving conventional
- Be in control of your Bank Account. With modern banking services you can access your money electronically 24/7 by ATM cards, online bank apps or mobile money, this makes it ideal to withdraw & spend
It’s not being primitive deciding to deactivate your mobile bank app if it’s really tempting, it’s actually very fine to keep the ATM card at home
Avoiding regular access to your saving does not only relieve you of the frequent bank charges and impulse purchasing, it also cushions you from eating into your savings
In addition, use your idle deposits to make extra money, you can fix your money and the bank utilizes it to lend others and pay you interest
Still, when your monthly salary hits the account, try to hold it for at least 15days to allow the dust settle, after 15days a lot of unnecessary desires would have blown-off then you can deal with the real needs.
- Reduce quantities. 30% of your money leaks through the unnoticed day-to-day tendencies like addiction to alcohol, preparing too much food, paying subscription on more than one decoder.
Look, if a journey is distant, won’t public transport help you reduce fuel load & servicing costs for a private car?
If you get your meals from the same nearby restaurant every day, won’t bargaining for monthly discount rates help you reduce the huge daily rates?
For “Safari workers” if one room can accommodate you with your holdings, won’t it save you heavy costs for a full apartment?
“Perfect spending choices reduce cash wastage,” this makes room for saving.
- Make strategic use of employment benefits. You’ve heard of a tag-line “Money from salary will never be enough”
Whether this is true or not, what matters most is how one takes advantage of the situation
Learn to utilize your incidental employment benefits, for instance, Medical insurance, bonuses, commissions, housing, meal and transport allowances to counteract your regular expenses
Then, use your net pay wisely to save and invest
- Opt for automated saving. You must have heard your business coach saying “Pay yourself first” it literally means before you spend on anything else put some money aside for your future well being
This works out well with the automated saving scheme. How is it done?
Instruct your bank to deduct a given amount of money from your account every specified period and wire it on your savings account, Sacco, Insurance, etc.
This does not only tame the temptation for unplanned expenditure, It also makes saving become a routine.
Financial Management Specialist