A popular saying goes; “If you save money today, the money will save you tomorrow”. Currently, this quote may be unpopular among the masses, judging from the Local Debt Exchange in Ghana.
Despite this, the importance of savings must be maintained. Making money is as important as keeping it. As common knowledge as savings is, the practice is not ubiquitous as its name. Here are some statistics on savings culture around the world, according to the Bill & Melinda Gates Foundation.
It is estimated that 3 out of 4 adults in developing and middle-income countries don’t have bank accounts. Sub-Saharan Africa is the least banked region in the world with 80 percent of its population lacking access to a bank account; followed by the Middle East/North Africa at 68 percent, and Latin America/Caribbean at 65 percent.
For the few who have bank accounts, the discipline to consciously save is missing. Developing a savings culture demands commitment, discipline, and a plan which can be summed up in Warren Buffets' famous quote, “do not save what is left after spending, but spend what is left after saving”.
Man is a bundle of desires and wants. However, a person’s earnings are limited to match the depths of his or her desires. It is therefore important to save first and spend what remains, lest your desires consume all your earnings.
HERE ARE STEPS TO DEVELOP A GOOD SAVING CULTURE
1. Open a savings account if you do not have one.
2. Identify all your sources of income.
3. Apply the 20/50/30 rule of thumb. This means 20% of your earnings goes into savings, 50% for your necessities and 30% goes toward discretionary items.
4. Have a budget to guide your expenditure and commit yourself to stay within your budget. Make use of mobile apps to track your expenditure.
5. Review your budget periodically to make adjustments. For instance, if there is an increase in prices and you have to spend more, you need to adjust your allocation for food upwards whiles looking to cut down on other discretionary expenditures to ensure you can continue saving the committed amount. When your earnings increase, be committed to saving more than spending more.
6. Do not spend monies you have not received and do not buy things you do not need. He who buys what he does not need steals from himself - Swedish proverb.
Take that bold step today toward saving for a better future.