Saving is one of the most difficult yet important things to do. Especially since there is always something to pay for. Young people, in particular, can find it hard to save, given they are either students with little financial assistance from the family or working low paid jobs.
For most youth in the world, there is a transition phase between living with their parents and going to school and a progressive evolution toward their emancipation which is motivated by going to university or starting a career. It is such a great feeling, that first breath of independence but it can take time to learn to manage the responsibility of our own finances or lack thereof.
The saving rate in West Africa is stated to be less than 15% according to the World Bank. One of the lowest in the world. However, this is expected to increase alongside financial literacy. Which is why next-generation mobile wallets like Koosmik could be the emancipation tool you have been looking for.
Regardless of whether you are young or older, in Europe, in Africa or anywhere else, with cash in our hands there is always the temptation to spend it. Here is our guide on saving:
- Switch perspectives
Saving might seem difficult but with adequate planning, you can reach your desired goal; it all starts in the mind.
Most people think about saving in the wrong way.
Most of us approach savings like this:
Income — Expenses = Savings
Whereas really, we should see it as:
Income — Savings = Expenses
“save first, then spend ”
- Start small
“The general rule of thumb is to save 20% of your income”
This is easy to say but not so easily done! If you start by trying to save 20% you are more likely to give up when you find yourself needing money for something. A far wiser choice is to start small with an amount you are confident you can live without and progressively increase it. As you see your savings you will find yourself motivated to save more.
- Contextualise the amount that you are saving
Consider the purchases you don’t think twice about, like going out with friends, buying new clothes, buying some candy. When you contextualise what you are saving you realise that saving 2 000 F a month is the same as the cost of going out for dinner with friends. Furthermore, setting aside 200 F a day which is less than the price of gum, would result in having 6 000 F by the end of the month. Not bad right?
Food for thought: What if your mobile wallet allowed you to create your own automatic savings plan. You chose how much you put into your savings daily, or monthly… Watch this space.