Ideally, you should have enough money everyday of your life. Unfortunately, that is not how the world works. If your dream is to have a comfortable life, then it is time to consider developing a savings culture. Saving a pesewa of your income a day will go a long way to bringing your dreams to life. The following steps will give you some pointers.

Assess Your Worth

To start with, you need to measure how much you are actually worth today. This means put together all the stuff you own, from your bank account to the heads of cattle in your pen, your monthly income and the number of cattle in your ranch. These are your assets. Then, subtract from them all your liabilities comprising of the loans you have to pay back and other major payments you have to make. The result is your net worth.

Having assessed yourself, you have a good understanding of where you stand financially. Your savings target will then be tailored to meet either your liabilities or a dream life after pension. Next, you should draw up a budget.

Develop a Budget

The old saying is that “If you fail to plan, then you plan to fail.” Developing a savings culture begins with a clear idea of how much you need for your monthly expenditure. And the only way to figure it out is by drawing a budget.

A budget will help you define what your monthly expenditure is as against your income. In the process of drawing up a budget, you will understand your needs and your wants, and take appropriate steps towards curbing your costs and improving upon your savings habit.

Track Your Spending

Don’t create a budget in name only. To develop and sustain a savings culture, it is necessary to understand where all your money is going. Start by recording every bit of financial transaction you undertake in a day. Write down even the smallest purchases, including those few pesewas you spent on sachet water. If you give out money to charity, record it as part of your spending. That way, you will be able to tell if you are truly living up to your budget or spending more than necessary.

Lower Your Debt

Whatever plans you have for the future, make sure you don’t lose sight of your debt. Failing to service your loans could leave you in a precarious situation when your creditors call in their monies. If there is the chance to restructure your loan with your bankers, take the chance. If not, paying it off should be top of the list on your budget. As you calculate your needs for the month, make sure your debt obligations are in there as well. Any savings should come after you have deducted all these.

Save From Source

Speak to your bankers to deduct a percentage of your income each month and save it in a secured account. Most commercial banks have fixed-time deposit account options. If you withdraw before the right term, you will have to pay a penalty. This surcharge is to safeguard their own investments but it can serve as a deterrent for you as well.

Start off by stashing away a fixed percentage of your income. Some say 30% is a good figure. Whatever percentage you pick, make withdrawal so painful and long that you will be discouraged from withdrawing from that savings account.

Make sure you don’t count the pension payments through SSNIT as part of your savings. Mandatory payment deductions don’t even reach your bank account to start with. You will need more than your SSNIT contributions to live a better life after retirement, and so make sure you are saving as much as you can each month.

Build an Emergency Fund

Emergencies don’t normally announce themselves before happening. It is therefore important that you have some cash stowed away for such misfortunes as a loved one falling ill, or you needing to buy a new smartphone for your work.

Some advice keeping as much as three months’ worth of income stashed away for emergency situations. Others say six months is good, while others think you would need up to a year’s worth of income. The amount you choose to save is up to you.

The benefit of having an emergency account is that you don’t have to stop saving in the case of an emergency. Because you already have cash stowed away, you can fall on it during a crisis while you maintain your regular daily or monthly savings.

Learn Discipline

It won’t matter how much planning you put into becoming more financially secure if you don’t incorporate a bit of discipline into your savings habits. Discipline is what will tell you to forgo that snack in order to save a couple of cedis. Discipline will remind you to not carry too much cash because it increases your propensity to spend. Remember that building a savings culture takes time. There will be false starts along the way but try as much as possible to always go back to your plan.

To build a solid savings habit, save everyday, even if it’s a pesewa.