Saving is paramount as borrowing poses many disadvantages. Every time money is borrowed, interest is charged. One therefore ends up paying more money than borrowed. Borrowing to invest may not always yield good returns, hence it’s best to save.  

Most people live off their paychecks. They do not have the money to save. They don’t seem to have enough money left over after paying their bills and meeting other pressing needs.  I'm not just talking about the low-income groups. Even those driving new cars, living in nice homes and wearing branded clothes are barely making it financially. They have a hard time finding extra money. 

Is that you? Are you caught in an endless cycle of want? Do you complain that your finances are not working for you? Sit down and examine your financial goals. You will retire some day. Have you started saving? Your children will soon want to join college. Have you started saving? You want to pay all your bills. Have you started saving? It’s all about saving!

Why  save?

Brenda Kagwira receives a Certificate from SIFE Kenya Asst. Programme Manager

Emergencies are part of life, and we like to be prepared. An expensive car repair can be incredibly damaging to your finances if you are not ready for it. If you have a savings account, you could pay to repair the car with cash and not run up more credit card debt. It also allows you to keep older cars longer. It is a lot cheaper to occasionally fix a car than  to buy a new one. Having cash set aside for emergencies can turn mountains into molehills. 

People pass away, get hurt at work or get laid off. We have accidents. We have car breakdowns. Washing machines stop working. Disasters hit our homes. With emergency savings, one is cushioned from financial ruin. You can make ends meet until you are able to figure something out. You are able to buy that new washer without hurting your monthly budget. You are able to sleep without worrying. It's in your savings. 

You ought to set up saving goals. Once you have savings built up, you should start working on your goals. You can work on several at a time. For example, if you are able to put  Kshs 10,000  from each paycheck into savings, yet have three goals you are saving for, do a portion to each. For example, if your goals are for retirement, college for your child or buying a home, decide which is most important to you and what you need to dedicate of the Kshs 10,000 to each goal. You might put the largest amount to your retirement, the second largest to your home and the third to college education. 

Some goals that can only be fulfilled from savings. What do you want in life? To be out of debt? To own your own home? To retire comfortably? You must start saving now. Most people save money slowly, over time, and they generally both earn more and save more the older they get. In that context, it makes sense that early-career retirement savings carry an extremely high-risk profile, since they are so small compared to total lifetime savings. 

Saving will allow us to retire earlier than our peers. I do not have a problem with work, but work is not the only reason for living. Saving will help us to relax in future. It will enable us have vacations every year. Vacations are healthy.  

The more you have in savings, the more money you can make from the savings. It really is not the fact that you have Kshs 1000 in a savings account, but rather that the 1000 Kshs is making you more and more money every day, month and year. This is a  reason to have savings accounts! 

By Brenda Mutuma Kagwira, Africa Nazarene University

An essay submitted during the Postbank-SIFE Essay Competition