Chapter 12


In Chapter 11 I wrote about savings as a way of avoiding mental health challenges that come with financial challenges. We noted that many life challenges originate from financial challenges while non-financial challenges can be made easier if one has financial stability. We also noted that money is definitely not the answer to many problems. There are many more reasons for saving but I hope that the few that I have talked about in the last few chapters are helpful in giving a sense of why savings are important. In the following chapters I would like to spend some time sharing some tips on saving. You will note that the tips I will share may sound like another way of making the same point I made in previous chapters. If this is so I hope you benefit from a slightly different thought process on savings. The tips should certainly help you understand some key aspects of how to save.


Saving tip 1


As I indicated in previous chapters, saving is a commitment and can be painful. It usually tests your resolve. For this reason, you need motivation to save by setting a monetary target. By painting and hanging a picture of what will happen once you have achieved your savings target.


Before you start saving you need to understand, in detail your income and your expenses. Make sure you match the income period with the expense period so as to compare like for like. It is important to use your guaranteed income (e.g. your net salary) as a basis for the computation. On the other hand, you need to compute your mandatory expenses, i.e. those expenses that you need to live comfortably until the next guaranteed income. 

In a typical case, mandatory expenses include, rent/mortgage, monthly groceries, transport, airtime, electricity, gas etc.  If you have a surplus after deducting your mandatory expenses, then you are potentially part of a special group of people (less than 40% of the world’s population) who spend less than what they earn. With a bit more diligence you can master what and where you spend your money on. With this information and a bit of discipline you can become part of an even finer group of people that have an opportunity to save sustainably.


The amount you save is not the issue here as every penny is worth saving and can build up to something great. Did you know that a penny that doubles every day for 31days is worth more than a once of payment of USD3million? Such is the power of saving.


I end this chapter with two quotes; The first one is from Pablo Picasso who says “Our goals can only be reached through a vehicle of a plan in which we must fervently believe, and upon which we must vigorously act. There is no other route to success”. The second one is from Warren Buffet where he advises “Do not save what is left after spending, but what is left after saving”. 


This is why you need to verify your income and expenses and commit to a reasonable amount to save.


Author: Ralph Watungwa

BAZ President



ENDS