I introduced the subject of Savings and emphasized how critical savings are to any Country, Company and/or individual. I did emphasize the point that while consumption drives economic growth, savings are the precursor to consumption hence the famous adage, “you eat what you kill”. There is no doubt that given the centrality of savings and the benefits that accrue from it, the process is painful and demands relentless commitment. This is why only a few entities and individuals can maintain a savings culture. This series highlights why savings are important in the long run. Here is one of many reasons for saving which we will discuss in this series.
While we all hope for everlasting happiness, it is a fact of life that sometimes we encounter difficult periods in our lives. This happens to everyone. Fortunately, most of the difficult spells in our lives can be resolved or made easier when you have financial resources.
Difficult situations (like illness or even death) usually present themselves without warning, and when individuals and/or families do not have sufficient financial resources to help the situation. As a banker, I have been approached by many desperate entities and individuals hoping that I could save their day. Unfortunately, I have only been able to help a small number of them. In such circumstances, the problems became insurmountable.
Many individuals believe that there is no need for medical aid cover, which is a type of saving to cover us in the event of illness. This decision may be due to limited financial income or the belief that one is unlikely to fall sick since they have always been in good health. Yet life can change, and some find themselves requiring emergency medical assistance when they have no savings or medical cover at all, thereby making the situation more miserable and costly. We have lost many of our loved ones not because there is no cure for their illnesses but that we did not have the financial resources at a time when they needed them the most.
I have attended funerals where the deceased had not saved enough to cover their own funeral expenses in the event of death. In some instances, the surviving relatives do not have savings to meet the cost of burying a loved one. In these situations, the loss becomes more acute and can even affect the family/individual’s ability to mourn the departed. It is when we are in these situations that we wish we had put some money aside to cater for the unforeseen. After all, death is inevitable and, in most instances, untimely, Hence the need to save.
Think about the impact of the COVID-19 pandemic which is currently ravaging families and communities across the globe. Many individuals and businesses have been affected through loss of jobs and earnings. It is those countries, individuals and/or companies that had savings that reduced the financial impact of the pandemic and the lockdown. COVID-19 was unforeseen and is unprecedented, but it did happen. This is why the vulnerable communities who did not have enough financial reserves to absorb the shock are still a long way from completing the vaccination exercises for their citizens and still require external assistance to achieve head PUBLIC immunity. This support has been critical at Country, Company, Community, and Individual levels alike. Experts have predicted that the post COVID19 Pandemic era may be characterized by reduced spending as Countries, Companies and Individuals realize the need to save to protect themselves from future shocks. It is a fact that those that had significant reserves/savings at the onset of the pandemic managed not only to ride the tide but to help others cope with the challenge. Unfortunately, for certain individuals and families, savings have been the difference between life and death, in such situations.
Author: Ralph Watungwa
BAZ President
ENDS