If there is one word to describe the year 2020, I believe that word would be disruption. Disruption in work itinerary, family life, education, social life, religious life, culture, just to mention a few.

Of course, our finances have not been spared. Globally, we saw economies that were doing well suddenly make turns towards recessions, at the national level we had to take seat and helplessly watch economic strides that were made over the years erode right before our very eyes.

Personal finances, perhaps were worst hit in all this; sources of income of many individuals who are bread winners of families ebbed overnight while others experienced income slashes. Amidst all that was the increased pressure to spend on what we came to learn as “essential goods and services”.

Why? Because man had to keep living. Prior to January 2020, who would have imagined that a time would come when we would have had to make a budgetary allocation for nose mask, sanitizers, immune boosters et al? Not forgetting dependent needs on the other hand had its teeth bruxed at this same ‘meagre’ income (granted yours never ceased).

In response, most people have had to deplete their precautionary and or emergency funds, and any form of savings.

Refresh the rhythm

But was it all that bleak? Certainly, not. In the pandemic was traces of opportunities which only few were able to leverage on. That said, I am aware the handful of people who utilized the opportunities the pandemic came with may disagree with my some of my propositions. That’s fair.

That said, I believe we are at a point where most of us have lost rhythm on their journey to financial independence. Why do I make such an audacious pronouncement? The desire to save and invest is being scoured by a habit of impulse spending.

Perhaps expenditure on essentials to survive the times or probably by a sudden realization that “tomorrow may never come”. No matter what the reason is, it is important to remind ourselves about the essence of making every effort to set money aside.

Come to think of it, would you have survived those difficult times if you did not have any “cushions” to fall on? It is in that context I voted to offer this ‘refresher piece’ to serve as gentle reminder for the benefit of us all. Herein, where we will revisit some simple tips that create a successful savings culture. Let’s press the refresh button.

Two key factors

Before we begin let us highlight two key factors that need to be present before one can save regularly for a determined period.

The first, and by far the most important factor, is the need for a regular source of income. Of course, without earning any income, the thought of savings will only be but a wishful one.

Not only do you have to earn income, it has to be on regular basis and yes, it should be enough to cover your basic expenses. It is suggested that no matter how little you earn, endeavor to make your savings part of your expenses. I would add that consider it an essential expense.

Secondly, it is vital to have little to no debt if you intend to develop a healthy savings culture. Debts and savings belong to the opposite sides of a coin.

Debts implies spending on wants now to pay later at a cost whereas the latter implies forgoing current wants to acquire greater callings later with interest. Yes, your income may not be enough, the more reason to be selective in the things you spend on so that you do not incur avoidable debts.

Having laid this foundation, let us shift our focus to our tips for today. Ready?

The savings culture – useful tips

To begin with, we need to remind ourselves that savings is a discipline. We need to be very intentional about it. You do not save just because you have enough money but because you are willing to forgo your current wants for bigger ones later. Ponder over this.

When last did you not have need of anything? When last was the money in your wallet ever sufficient? The answer is NEVER! Human needs are simply insatiable. Do you remember the last time you needed a mobile phone? The intention was to receive and make calls? Guess what?

Just afterwards, you your desire grew to have one that could take pictures and give you access to social media. And soon after, here you were craving for high end phone because you want to be in tune with technology, or so you claim. That principle of unsatisfied need applies to every other thing in life. For that reason, it takes a deliberate effort to commit to savings.

It is also important that we remind ourselves to treat savings as part of our expense. Most often than not, people recognize savings as that part of income left after sorting out your expenses. What if you have no money left? Does that mean you should not save? It is prudent that we set aside a percentage of our income as savings as soon as we receive the income.

This way we become more effective. Now, one may ask “what percentage of my income should I set aside?” The answer to that is relative, it is contingent on what your savings goals and timelines may be. Typically, investment advisers recommend that at least 10% of our income should go into savings.

After recognizing savings as part of our expenses in a budget, we need to make the effort to spend according to that budget. Here’s why. A budget gives direction on the things we spend on and in what quantities (in terms of value). The current culture encourages impulse spending and that is not helpful.

It is important to note that as much as possible, we become frugal with spending so that we do not run into reckless debts. It is also worth noting that if we do not play within our budgets, we will end up wondering where our money went instead of us telling it where to go. Be in charge of the movement of your funds.

And here’s the final tip. Our final tip will touch on the need to be willing to start small. As the saying goes ‘little drops of water make a mighty ocean’. Many people tend to think you can save only when you have huge sums of money. This is not true. In fact, you can save as little as the 50 pesewas change from paying the road toll.

The power to increase your savings lies in the consistency and patience with which you save. Perhaps you experienced a drop in income over the past year, you can still save.

It does not matter how little it may be. The truth is, can you expect a fruit when you have not sowed a seed?