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Top four reasons to save money

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By Sahara A. Sheikh
So there I was. Shocked beyond words! How can a person have a negative bank account? It had been my first time getting a debit card and within a month, I had a negative in my account.

They say that you truly understand something when it happens to you. It took me around two weeks to absorb the shock and my next paycheck to make me realize why I should be financially responsible.

When this happened, I had barely turned 20 and had started living on my own and making my first income. You could say that I was too excited to spend since this was money I earned and not given by my parent.

Well, that was the first and last time I ever had a negative in my bank account. While a personal finance class helped in my journey, it was my motivation to be on top of everything which shaped the way I understood about money and learnt on the importance of savings.

Well, since knowledge is power, I have decided to share on the importance of savings because after all, there is someone out there who is probably in the same predicament as I was back then.

Sav
saving money.

Financial freedom
Why should you save? There are several reasons but the top most important is financial freedom.

The problem with many people is that we live for today and live beyond our means. We forget about the problems of tomorrow. Financial freedom means less financial stress as we would have saved enough to do what we need to do.

The rule is to always have a minimum of six months’ worth of rent saved in your account. The six months rule is such that in case someone loses their job, they will have that cushion money to sustain them until they have another job.

Go ahead and check your bank account and see what you have there? Is it zero? Is it 100? While this is the reality, guess what? This can be changed. Starting today.

Don’t worry and let’s get started today and reduce those nightly worries. Whatever your income, remember that savings come first. That is, don’t spend and then save what is left. Nope! Save first and then spend the rest.

The advised savings is at least 20% of your income. Let’s say you are earning 10,000Kshs then that means 2000ksh should go to savings. Annually, that would be 24,000 Ksh saved.

Financial freedom also means you will have extra income to take calculated risks when it comes to starting your own business. Businesses don’t always succeed the first time and as such having that savings allows you to start on several projects without having to worry about money.

Moreover, if you want to take a break from work and just relax, maybe for a year, then guess what? Having a savings does that for you! Hello, financial freedom!

Emergency situation
Reality is that life happens and we never know what and when it could happen. I always like giving the example of health emergencies because this is among the most unpredictable thing that could happen in one’s life.

An accident could occur suddenly where someone needs an emergency operations or have to be taken into ICU. And we know how much medical expenses are, right? Consultation alone costs 1000ksh. The several tests that have to be taken adds up thousands of shillings which the average person doesn’t have. It is just a nightmare!

Comes in the second reason for saving! Emergency situation. We should have some savings set aside for this kind of situations. I mean look at this year.

Who knew that corona would hit and have the whole world at a stop? Literally, nobody! Many people have lost their jobs and are not sure what to do because they didn’t save. This was unpredictable and major and no one anticipated it. If anything, this should serve as a lesson for those who have never saved. Lets make it a habit. After all, habit is second nature.

Education
This one is mostly for parents. Education is not cheap. Especially universities! So create an account for your child early and start saving. Even if it is 10bob. You know those extra coins you have left from buying vegetables? Have a jar in the house where you throw all of them in there.

As parents, we want what is best for our children. We want them to attend the school of their choice without finance being a limiting factor. At least that is what I want for my children.

Having grown through financial difficulties, I would not want my kids to have to worry as I did. Hence, the reason I am advocating for savings. Parents, let save for our children and reduce their financial stress as they are growing up.

Helping others
At one point in our life, we have asked for financial assistance from that wealthy relative of ours. If you haven’t, then you are most likely the wealthy relative.

Personally, my cousins helped me a lot with school fees and university applications during my parent’s financial difficult times. And it is because of that assistance that helped me learn the importance of giving back.

Likewise, saving money, allows you to help others in need. It becomes sadaqah for you. Have that relative who needs capital to start a business? Give them the money. Your siblings need school fees? Offer to pay it instead of your parents doing it. That neighbour has no food this month? Buy it for them.

My personal stand when it comes to money is that I would rather be the person giving than the person asking for money from others. If you are like me then start on that saving journey.

One of my favorite finance book that I would recommend for everyone to read is Rich Dad, Poor Dad by Robert Kiyosaki. One of the quotes in the book is “Intelligence solves problems and produces money. Money without financial intelligence is money soon gone. ” You should not be among the tales of those people who once had money but all of a sudden are poor.

Let’s educate ourselves on money and make it work for us rather than us working for it. Remember financial freedom means no or minimal debt which in turn means less financial stress. No or less financial stress means a major part of our problem is solved.

So, start saving!

Sahara A. Sheikh is a business management consultant, full-time mama to twin boys, and an ardent believer in being empathetic towards people. Follow her on Instagram @Zahra (z.a.s.y) . For consultations contact her on email at sahara.abdikadir@gmail.com

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