African cultural values forbid “eating with both hands”, living from hand to mouth, in other words, it means living without savings. Though times are hard and considering the present high cost of living, there is still a need for us to save, even if it is a very small portion of our income. By implication, having family savings provides future security or something to fall back on when the need arises.
Family saving
It is a deliberate decision to set aside part of one’s income for future use. It could also be described as money left over after taking care of essential consumer spending. Family saving is money kept by a family purposefully for future use. Savings help in pooling up funds for future use by a family. It is a healthy financial habit that families need to develop. An adage that says, ‘saving for a rainy day, ‘ underscores the importance of saving.
Types of saving
There are various savings methods that families can adopt. They include the following:
Deposit saving accounts: This is an account opened purposely by couples for saving a certain portion of their income. This could be done daily, weekly, or monthly, depending on their source of income. Such a kind of saving has little or no interest in the money saved.
Pension accounts: Retirement is inevitable. Whether a person works for the government or a corporate body or is self-employed, there comes a time when one can no longer be inactive. Parents must get involved in pension accounts to have something to fall back on when they retire.
Investment fund: Investment involves using a portion of family income to acquire assets that can generate more funds for the family. Investment is the most viable saving method families can pull their resources into because the return on it is more than all other types of savings. Examples are shares, treasury bills, land acquisition, etc.
Cooperative thrift society: This is another way of saving and getting access to loans for family businesses, projects, education, and other immediate needs.
The type of savings method a family chooses should allow them to successfully achieve their savings goals. Couples should explore their savings options, consider their needs and income, and decide on the best options while they are led by the Holy Spirit.
Importance of family saving
Savings can be as simple as keeping money aside daily, weekly or monthly. Savings can help meet financial commitments as well as family pressing needs. The following are other important aspects of family saving:
Emergency needs: Families must save for emergencies. For example, assessing health facilities in case of ill health may not be possible with coverage health insurance policy. At such times, family savings may provide relief. Other emergencies may include accidents, natural disasters like flooding, etc.
Payment for huge/large purchases of goods: A family savings scheme can assist families in procuring essential equipment and facilities for family use. Examples may include washing machines, automobiles, motorcycles, landed properties, furniture, etc.
Payment of debts: Family savings can assist families in clearing accumulated debts over time.
Retirement period: Family savings can help meet family needs after retirement, especially where the pension is not enough to cater for the needs of the family.
Reduction of financial stress: When families have a strong financial base, they are not stressed. They are calm in times of emergency, knowing that they have saved for rainy days.
Ways to reduce spending
Every family is peculiar, so are their needs. When family expenses increase more than income, there is a need to cut down on spending. Families should be able to differentiate needs from wants; that would be their scale of preference on what to spend money on. The following are tips on how to cut down expenses in the family.
- Reduce food wastage.
- Cut down the electricity bill by putting off electrical appliances when not used.
- Cut down on internet use, phone recharge, data purchase, etc.
- Reduce expenses on occasions like special clothes for occasions.
- List some other things we spend money on that can be eliminated from the family budget.
In the modern world, it is not unusual for people to find themselves in difficulty due to debt problems. These debts pose immediate problems and are also a significant barrier to being able to start saving for the future. However, access to education and information on managing personal finances leads to an attitude of saving money. Many people do not know where to start when it comes to saving money for future use.
How to develop a savings culture
How much do you save? I hope you put money aside. If you do not, you should be able to develop a culture after this lesson. How do you become a money saver? I will first tell you how you cannot be one: It is not by using discipline or willpower. Discipline and willpower only work in the short term. What works in the long term is to understand your spending habits. Once you understand, you can change by building new habits. That is how you become a money saver. This is what is known as a money-saving attitude. The following principles will help you pick up a new lifestyle. Read the similar post on this page.
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