One of the most challenging areas of life is the area of finances. There are so many options when it comes to income sources, investment accounts, and business opportunities but little talk about saving. Why? Because saving is a practice of the successful and wealthy who are a minority therefore this wisdom gets drowned by the get rich quick noise.
Judith O Muyiinda, head of marketing and product development at Housing Finance Bank explains why saving is essential for actualisation of any financial dream.
If you are experiencing financial difficulties right now, the most effective way to make sure it doesn’t happen tomorrow is to start saving now.
Saving in a nutshell is that act of not consuming all of one’s income and whatever is not spent out of their disposable income, is defined as “Savings”.
It can take the form of “Personal Savings” which refers to that income that people save so as to avoid consuming all of their individually earned income. Such savings can remain at their respective bank accounts for future use or are actively invested in houses, real estate, bonds, shares and other financial instruments.
Anyone can save all you need is the will to do it and strength of character to control spending and conscious planning. Also behavioural rules play an important part in the saving culture, that is to say that one may be accustomed to spending all their money as they get it while another may have the saving culture as a way of life on a more frequent basis.
In addition, the reasons to save vary from one individual to another. Although in the long run, it helps to save when one has a set goal and objective. Some of the goals that people have for saving can range from saving for emergency funds, saving for retirement, saving for one’s education, saving for a much needed vacation, saving for a new car to saving for sinking benefits among others. To achieve these entire objectives one must live by and have motive and drive to achieve it all.
Also, such motive to save will normally vary from one person to another. The motives can be grouped under the power will to save.
Power to Save:
Power to save depends on the level of income which one earns. In cases of a nation for example, power to save depends on proper use of a country’s natural resources. This is so because when the income is low, almost the whole amount is spent on meeting the basic necessities of life thus saving is very nominal. In case of high income though, one can save if they like because they have got the surplus income over consumption.
Will to Save:
The willingness to save is influenced by a couple of considerations such as; one’s foresight, social and political considerations, temperamental considerations, security of life property, monetary stability, facilities for investment, saving and the rate of interests.
In the end, both accrued and invested personal savings can give rise to personal wealth standards which comes in handy to both individuals and nations at large.