Globally, people are encouraged to save portions of their disposable income as a critical ingredient for a better and secured financial future. It is a personal finance subject preached to all constituents of the income divide: whatever you do and no matter the size of your income, save some of what you earn for tomorrow’s critical expenditure calls. Technically, it’s a form of protection that makes impeccable sense.Globally, people are encouraged to save portions of their disposable income as a critical ingredient for a better and secured financial future. It is a personal finance subject preached to all constituents of the income divide: whatever you do and no matter the size of your income, save some of what you earn for tomorrow’s critical expenditure calls. Technically, it’s a form of protection that makes impeccable sense.Whilst we understand the essence of saving for the future and are willing to commit portions of our earnings to create reserve for that matter, developing the culture has been a relentless challenge for most people: “the spirit is willing but the body is weak”. The situation is simply understood, its either people are unable to create space to save at all because they see current disposable income as not being enough to support any personal savings commitment, or they lack the discipline to save, or are unable to achieve savings objectives because the solutions on the market are not effective enough.Fact is, even the weakest earner would have the strongest will to save. This strong will to save is born out of the unexpected and expected situations that life potentially throws at us.  As rational economic beings, we reasonably foresee that the future is full of unknowns. These unknowns are risks which we potentially face. Whichever form these potential risk elements takes, building cash reverse would set us in a preparatory mode. And arguably, the best way to create that reserve is incrementally in a sustained programme of savings. This is rested on the reality that, whilst we are worried of unexpected happenings that can potentially throw expenditure calls at us in the future, the present has its own spending need that requires taking care of from same disposable income. Thus, a reasonable determination of how much is spent and saved is important but sometimes difficult to arrive at given the level of uncertainties we are faced with. For instance, if we can reasonably anticipate that our rent would expire in a year’s time and the landlord has hinted of 20% increment, then we can reasonably work out how much we need to save periodically to be able to arrive at the future rent payable amount. On the other hand, although we know sickness is inevitable we do not know what kind of health situation we would be faced with hence what health bill awaits us in the future.So without a doubt, the rationale for building-up cash reverse is universally understood. However, developing savings culture has proven difficult for most people and the causalities are not difficult to figure out. The will to save, irrespective of how strong, is obviously not enough to achieve savings objective. Discipline is everything. Increasingly, savings programme fail not because people have weak will. Savings programme for most people fail because they lack the sustained discipline required. A number of factors drive weak discipline:1. If there is no defined savings goals in place. Saving just because income exceeds expenditure lacks vigour, direction and commitment. Absence of these ingredients makes it a programme of convenience which should not be the case with purpose-led savings. Likely outcome is as soon as new need and wants shows up, the programme is abandoned. So look for available solution that fits your savings objectives or talk to a specialist for possible bespoke solution. 2. If there is no fixed determined amount to save periodically, it becomes arbitrary. Saving this way drives possible laxity and little purpose. People under this kind of savings programme feel no urgency and real commitment. And this mostly happens when there is no savings objective. Seek solutions that require mandatory fixed monthly commitment amount.3. If the savings process is not convenient enough, it serves as a put off that does not encourage religiousness. Where a lot of convenience is not built in the savings solution, such as how people make the periodic deposit, it drives laxity and thus inability to stay disciplined. Seek solutions that drive convenience such as one that requires bank standing order or mobile money deposits.4. If available savings solutions lacks embedded disciplinary features that is required to help people save. This is particularly identified to be solutions that allow savers readily access to their savings accounts. Some degree of restriction enhances discipline and without it, people will always draw on their savings even where the expenditure calls are non-critical. Seek solutions with restrictive covenants.A successful savings culture requires the backing of critical behaviourial elements which un-exhaustively include creating reasonable expectation of the future, building of consensus among dependents, delaying gratifications, and seeking the right savings solution that will help achieve the objectives. These are critical building blocks to stay disciplined in any purpose-led savings programme. Form reasonable expectation of the futureThe expectation that tomorrow is full of uncertainties can potentially drive unimaginable action. Naturally, we are wired to do everything in our power to avoid painful and stressful events in our life. If we can reasonably foresee that the future holds surprises that can hurt us, we would take steps to prepare in any possible way so as to reduce or minimize the potential adverse impact.Building future reality in an imagined scenario with expenditure implications will drive us to want to prepare financially for that potential reality. In effect, we would want to save towards the expenditure possibilities that await us. Without such plausible imagination, we won’t recognize the urgency and the need to save. For instance, we would have to force-think that fuel prices could be increased significantly, the car we use could break down unexpectedly, including other potential realities. Realistically, any of these scenarios can actualize and knowing that automatically draws attention to the fact that cash would be needed to adjust and not having the reserve can pose a stressful situation. This sort of thinking will without a doubt reinforce the need to save and thus drive the required commitment.Build consensus among dependentsCreating space for a savings programme would require the buy-in of all dependents of the disposable income and this is especially the case with families. This releases undue pressure if the constituents are reasonably aware that the reserve building programme is critical and necessary. It is worth noting that, consensus building is particularly necessary where self-imposed expenditure cuts are significant such that it is easily felt by dependents. Whilst some constituents will resist cuts that impact their lifestyle, a more compelling case will more often than not secure the necessary buy-in.Postpone gratificationThe understanding that subjecting oneself to a savings programme might mean redirecting portions of income from spending account to savings account is important. Holidays might have to be reduced or cancelled, freeze on new suits, weekend trips may have to be reduced, and among other non-critical spends. These self-imposed remedies are not permanent but only for the estimated period of reserve build-up. Once pre-determined amount has been achieved under the savings programme, such as in the case of target savings, it will then make sense to relax or completely unfreeze.Locate the right personal savings solutionsA savings solution that aims at delivering real value should be able to help people to save because on their own, it is difficult to cultivate the right savings discipline. The solution should be target-led as well as restrictive enough to drive the necessary discipline. If indeed the solution is aimed at helping people to achieve a financial objective, restricting access when the objective has not been achieved yet is vital. In conclusion, a savings culture is only possible when people are able to build the right discipline to stay in a savings programme. Of most importance is the ability of available personal savings solution to drive the necessary discipline, via an appropriate dose of embedded restrictive covenants.


The Chief executiveStrategic Bridge
Strategic Bridge is a retail-focused micro-savings specialist business committed to offering personal savings solutions that enables the actively working citizenry build-up savings purposefully and un-painfully.
Contact: 0506 132 239               0277 324 258URL      : www.sbghana.comEmail    :,