Nigeria and Nigerians are perhaps one of the countries and peoples in the world with the lowest saving culture. With over 100 million adult population, Nigeria has an average of 40 million bank accounts with attendant bottlenecks inhibiting savings.
The majority of Nigerians aren’t so great when it comes to saving money. Almost anyone who earns a regular salary is able to save something each month, even if it is only a small amount. Our inability to save is usually because we lack discipline and are tempted by things we see in shops, on TV or in magazines.
Intellectuals have long debated about the importance of savings for individuals and for nation-states. Warren Buffet prioritized the importance of savings over meeting daily wants and expenses in the following words, “do not save what is left after spending, but spend what is left after savings.”
The importance of a substantial savings rate cannot be over-emphasized. Apart from curbing inflation because it reduces excess liquidity in circulation, it is a consensus that economies where savings rates are high; their per capita income are higher, standards of living are higher and life expectancy is found out to be high as well.
According to the former President of the Chartered Institute of Bankers of Nigeria, Debola Osibogun, “savings have been variously explained by different authorities as the sum left over when the cost of a person’s consumer expenditure is subtracted from the amount of disposable income (income after tax) he earns in a given period of time.“
“The problem with this definition is that, unlike Warren Buffet’s viewpoint, it gives prominence to expenditure first over savings. It is important to note that Buffet’s approach is similar to that of Joseph in the bible.
“During the days of Pharaoh, Joseph set aside the Egyptians’ savings during the years of plenty before sharing and selling the rest of the harvest to the people. It was on this basis that Joseph became a wealthy man in Egypt because he had saved enough during the season of plenty to be influential during the dry season.
“Indeed, apart from the economic benefits that accrue from savings, there is also evidence from a study by the Northwestern Mutual Insurance company that savings are linked to increased happiness.
“The running themes in all definition of savings are two key concepts; savings before expenditure and proper security of savings. Like Joseph and Buffet, it is important to save before spending but more importantly, it is pertinent to keep your savings in a safe place to safeguard them from theft and misappropriation.
“Modern-day society is more complex than ever before, we have technological advancement beyond the fathomable. This makes it riskier to keep money or any form of valuable products at home.
“The modern-day bank, however, solves this problem. It is a licensed institution that can securely keep valuables from armed robbery and deterioration because of the superior storage methods and facilities and the foolproof security presence at its disposal.
She concluded that “factors inhibiting a habit of active savings in the country can be economic, social and/or psychological. Several works have identified the following specific hindrances to an effective savings’ culture in the country. They include high cost of living, lack of confidence in government and key stakeholders in the country’s financial system, impulsive purchase, the influence of advertisements, cultural beliefs and poor infrastructural facilities that promote a savings’ habit.”
Most people are looking for ways to save some extra cash and cut back on their spending when they are ready to let go of their bad financial habits.
Little savings can add up, especially if you do it consistently over time, and doing several things all at once may mean that you can save significantly each month. Sometimes all it takes is that first step in the right direction to get things moving in your favor.
It is on this note that Clara Decker, marketing manager at CouponsMonk.com, identified the following as the major benefits/advantages of saving:
Everyone wants to retire at some age in life. To live happily and stress-free at that time, you need to start saving today. If you start planning your retirement fund at an early age, you can retire whenever you wish.
Savings are also important to maintain your lifestyle at that time when your bank account will stop getting credited every month.
A good education is an investment for a better future. Each year more people end up at various schools to earn their masters or doctorate degrees.
If you have goals of reaching some college or university, you will also need huge funds. So, start saving today for your dream.
The future is full of uncertainties. You never know which unexpected and emergency expenditure will come next knocking at your door. An accident or a sudden hospitalization of any family member, a job loss, a broken roof, etc.
That’s where the importance of saving money comes in. If you are prepared beforehand, it will be much less stressful in terms of financial condition.
Another good reason to save money is that you can take the calculated risk in life. It gives you freedom of choice. Whether it is leaving your job and starting a new business, leaving work and going back to school to switch careers or investing in someone else’s business, having money in hand gives you confidence and path to move forward.
You might get an opportunity to invest in a big project or idea. Having sufficient saving gives you the chance to grab that life turning opportunity.
Having a habit of saving will enhance your life by not letting you spend money on reckless things and accumulating it for major expenses like buying a new car or preparing for the wedding, etc.
Having enough money to invest is adding to your source of income. It helps to meet your personal financial goals.
You can invest in stocks, real estate, mutual funds, bonds, etc. These methods will offer more return than just saving. A saving account provides you meager interest which couldn’t even pace up with inflation.
Some expenses in life are such which you just can’t avoid! Paying children education expense, loss in business etc, are inescapable even if you have to take loans. Financial crisis can lead to a number of other issues like anxiety, insomnia, and even heart problems.
So, saving money is crucial for having peace of mind. When you know you have your financial needs under control, you tend to enjoy life without worrying.
Therefore, saving is an important tool that can help you to have financial security for the future. Sometimes the hardest thing about saving money is just getting started.
I would conclude my piece with the following quotes about saving:
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.”
Thomas T. Munger
“Waste neither time nor money, but make the best use of both.”
Benjamin Franklin