SAVING YOUR SAVINGS

Saving your savings: An Extract caption from R-EDx Int'l Journal

“Sadly, many children are not financially literate as their parents do not consider this important. To compound the problem, the curriculum of most schools does not include financial education. Therefore, the only time that most children get exposed to money matters is when they are much older. No wonder they struggle with their finances when they start working.”

(Adewale Ajayi – Money Matters: Your Children & Finances)

It is pertinent to know that many people have fallen victim of being slave to money and financial resources. If you are controlled by money rather than controlling your money, then this content will be really helpful.

So many adult lack the ability to manage any monetary/financial resources committed to them and that is why I would like to share some tips I learnt about a year ago while struggling to manage the very little resource in my possession.

“First thing you should know is that, if you would like to be apropos, you must stay off being glued to buying everything you see.”

Have you sat down to think of it, how much appetite you have and the urge that shoves you to acquire so much that you end up not using those things? Or those little properties you got over the years becoming somewhat needless? Of course you have and in fact, determined to curb these desires but to no avail. Some people are keen on buying junks i.e. biscuits, sweets, burger, ice cream, sausage etc. Well, I am not criticizing or saying you should not enjoy yourself rather, that is the more reason I would like you to read this series.

Some people can buy almost everything they see in the bus while traveling, all in the name and common assumption that “if I die today, who will enjoy all the money and wealth I possess?” You must break free from this mentality if truly you desire to have financial independence.

The act of having to acquire everything in vogue will eventually lead you into serious indebtedness and until you can manage that little resources, you may not be able stand firm and possess the true wealth. Luke 6:10 says “He who is faithful in a very little thing is faithful also in much; and he who is unrighteous in a very little thing is unrighteous also in much”- NASB version of the Holy Bible
In lieu of this, i.e. for you to cut spending in order to save your future (increase your savings), you need to know these facts I have summarized into 3 phases:

Phase 1: Self-denial principle

I am sure you know what this mean already, but let me emphasize that self-denial is not just denying yourself of some benefits, rather it involves being disciplined to stay clear off a particular yearning for something.
You may like a particular book, of course books are good especially when they are educational and insightful, and it is good to have them. Nevertheless, you should know that you cannot have everything you want or else, you will soon be impoverished with everything you have. So, in that case, you may need to look for someone who has that book and borrow from such person or visit a library, or just visit the internet to download the free PDF version of the book. It is more efficient that way.
Come to think of it, most of these things you buy, you end up not using them at all. I cannot forget the day I bought a shoe just because it is cheap and it looks very okay, I ended up giving it out because it was just too tight for me. Same goes to some excess clothes, shoes and other basic things we buy of which its cost seems to be insignificant to us, those are the things consuming our income which speedily accumulates and sucks into our savings.

In a bid to control these things, we must cultivate the habit of self-denial knowing fully well that we have a target to meet, we must deny ourselves of every distractions in order to meet that target.

Phase 2: Cutting your disbursements

You may think this is the same as the point above, but let me surprise you that it is not.
As much as you have a specific fixed income (i.e. salary, returns (ROI), or allowances etc.) that you receive, you must also be able to measure your expenses as well.
So many people become extremely broke (a slang commonly used when a person has no money) few days or weeks after they receive their salary majorly because their expenses are far more than the income they receive. This is a very poor lifestyle, in sense that you will always be at the receiving end.

You portend not to have the capacity to save at all only because you are committed to too many thing.
In order to cut your spending, you must take into consideration the following factors:
- Identify you monthly, weekly or daily income
- Determine the proportionate savings which should be between 20% and 30%
- Determine your fixed expenses which should not be more than 50% of your total income
- Identify other needs and prepare a scale of preference to filter for the things that are most important.
- Create room for miscellaneous expenses of not more than 10% of your income.

Finally, refer to the points mentioned in Phase 1 in order to discipline yourself in the application of key management principles identified above.

Having known the money management and budgeting skills, you will also need to understand that your savings which is between 20% and 30% should be separated into 2 savings:
• Specific savings: This should be for your self-development such as professional examinations, purchase and acquisition of personal property etc. This is usually compulsory
• Provisional savings: This is for the things that we desire and wish to acquire on a later date. This is usually only necessary and not compulsory

Phase 3: Contentment principle

As we all know that, nothing is ever enough for everyone, just like the famous economic theory of scarcity, we cannot have everything we desire.

In this light, we must learn to manage and be contended with the little we have, in order to have a happy life. Do not long for what you cannot possess, do not borrow to acquire things that will soon become irrelevant. Do not spend all your income on just satisfying yourself and self-desire, be wise enough to save. Soon, with these principles, you will reach the summit of your career where all you have learnt will eventually become much more meaningful and useful and; they will make you enjoy your wealth at that point in time.

One more thing…..Your savings will eventually save you when you need it most.


About the writer:
Richard is young accounting professional with the zeal of not only writing to improve the community, but also to create an acuteness of responsibility and self-development amidst the youth.
Feel free to contact him for any of your business talks, management seminars as well as biblical principle of wealth management.

Email: richard.okunola@outlook.com