Today on Your Money we are having a conversation, rather I will be focusing on some Saving myths and actual facts. Why you should save your money and the reasons why you should change your mindset on saving.
First off, we all earn money right? Be it wages, salaries or allowances, No matter how little, it’s still some amount of money earned right?
Yes I earn money. So what?
Okay, You earn but do you Save? Do you have some savings to show for your productivity? Do you Save some money from your earnigs? These are a few questions I want you to focus on as you read this article.
What does it mean to Save Money?
Saving can be defined as income not spent or deferred consumption. Put simply to save is systematically setting aside a portion of your earnings in a separate accout for future purposes. So why aren’t you saving?
Some time ago whenever I am told to save some part of my income (allowances I’m a student) the first thing that comes to my mind is “with which money?”. Like what am I supposed to save when I have alot of wants and needs to be fulfilled (let’s be realistic for a second here we as humans have more wants than needs). I have come to realise that there are lots of myths associated with the idea of Saving.
These myths entwined with saving are usually the reasons we dont engage in saving.
Myth 1: “With which money?”
This is the first myth I had to vounter, the myth that I needed to recieve or “make” more to enable saving. Alot of people believe their income is so small that they cant save.
Fact: No matter your income you can save. Yes you that earns $50 equilvalent N18,000. Yes you can save, no matter now little even if its $5 or $10 or even as little as $2 you can save. For my Nigerian brothers and sisters we always believe saving is for those earning “big” no fam! You have it all wrong you can save N1000, N2000 or even N500 and you can start a saving today.
Myth 2: “Just Save anything”
When I finally decided to start saving I would save N5000 today and N200 tomorrow and pat myself on the back like Go girl you have saved this money. Oya go and buy those shoes (I love shoes). Your saving for last month covered you this month. No no no.
Fact: I think we should all practice “concious” saving. By this I mean have a savings plan where you state in detail how much you want to put aside, why you want to and for how long like a goal. For example if I earn N5000 or $50 and I want to save N1000 or $10 every month from my earnings I think how will this affect my day to day life? And will I be able to keep this up monthly? After answering these questions if am still unsure then the best move will be to reduce the amount to a more sustainable sum of probably N500 or $5 which I can track over time.
Myth 3: ”I dont need to separate my savings because won’t be tempted”
Now this is one of the funniest ones because I have said this lie to myself alot! So I dont separate my savings well its a scam. When I used only one bank account to keep all my “monies” I ended up “borrowing” from my so called savings and I never paid back.
Fact: You NEED a separate bank account for your savings this is very important and keeps you out of the path of temptation literally and enables you keep track of your savings. I for one do not even have an atm to my saving account why? Being the shoe lover I am, I never want to be so tempted by a pair of Steve Madden that I forget myself and spend out of my savings.
Myth 4: “Savings isn’t fun”
I never saw saving money as fun, I used to see it as a burden like a sacrifice. Honestly I wasn’t excited the first time I put money into my “official savings account” because I was thinking of all the stuff I could buy with the money.
Fact: This was the case until I started saving I never saw the joy in it but after 5 months of saving my account was looking good. I felt proud of myself I was like “girllllllll”. It felt good and I was motivated to save more. So yes saving can be fun!
Myth 5: “You can stop saving when you reach your goal”
Okay this one is one that confuses alot of people setting a goal for saving doesn’t mean when you achieve that goal you stop saving, fold your hands and say “good job”.
Fact: There is no end to saving. If your income increases, increase your saving ratio and vice versa but do not stop saving. Even when you have to use all your savings and the goal was to settle an immediate need and you do, continue saving because other needs may arise. You can also save towards retirement, health care, paying off your rent or mortagage and so many other things including a vacation! Money saved comes in very handy and even in death savings may solve a need in the family of the deceased.
If you are not yet sold on saving, Here are some reasons why you should save:
- Saving is a major key in building long term wealth.
- Saving money helps you build discipline.
- Saving helps you cultivate better spending habits.
- Savings come in handly in cases of emergencies.
- You can save for financial security.
- Lastly saving gives you a sense of self fulfillment.
On all the monies earned and spent we should definitely Save even if its little in a regular systematic manner to ensure some level of financial security. Now back to my initial question Are you saving? Do you save? Have you ever had any myths as relating to saving? Share your tgoughts on the commment section. Let’s discuss!
I hope this article has been useful to you. If there are any topics relating to your money and finace you would love to see on these blog series. Kindly leave a title on the comment section.
Have a wonderful and fulfilled weekend. Love D.A♥