When you talk about savings to various people, they give reasons to how it is hard to save any money these days. Indeed the economy may look tough and many live on tight budgets, some scantly going through the months. But let times pause a question to myself and some of the people we engage on this; when was it favourable or when will it be favourable to allow you save? Some attempt to answer: if only my earnings can increase such an amount i can save some! We talk and refer to real life stories of those who earn even above the dream salaries and still struggle to save! One main problem is not understanding savings, not having a reason or goal to save for and worse thinking that you can save what is left after your expenditure. Almost all the times if you plan to save after spending, there is hardly anything left!
So let us quickly lay some basics about savings, to answer three key questions: What is saving, Why should one save and How can one save?
Financial Savings is a practice of putting aside part of your current earnings for future use. It can also be achieved through cutting down on your current expenses so as to increase such savings for future alternative use.
Putting aside requires that you put such savings in a safe place with some restricted access. You may not achieve the ideal by using your wallet stories of those who earn even above the dream salaries and still struggle to save! One main problem is not understanding savings, not having a reason or goal to save for and worse thinking that you can save what is left after your expenditure. Almost all the times if you plan to save after spending, there is hardly anything left!
To save effectively you need to have a savings plan. The plan starts with a savings goal (s). Why do you want to save. The goal should be so compelling that it moves you save. Saving like to buy a plot of land can be a motivating goal. The goal will move you to set a savings target in our above example you may consider buying a plot in and around Kampala say for 50 Millions by the end of 5 years. The target will inform how much of your earnings you will need to put aside. The target should be smart and realistic to your current capability.
There are currently many financial saving products on the market. Seek for information on products naming from savings accounts in Banks and other financial institutions to Fixed deposit accounts, to Unit trusts, to insurance, to government bills and bonds. You can as well save through buying assets like land which can be disposed off in future.
You need to have a WHY you are saving. Primarily we save for three main reasons: to ensure we can meet emergencies in future. On this many people are picking up on building their emergency funds. The covid-19 scenarios are still with us!
You can also save to meet future normal or planned expenses like school fees, some trip or events.
The other key reason for saving is to build reserves that will on its own invest, which in itself grows the money. What ever the earning level and state you in, you can save!
Looking forward to how these updates will modernize processes and strengthen industry reputation!
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