Going back to our root-savings 101


Welcome to another week of financial learning. We will be discussing the “hunger” impact of Covid-19 lockdown on the masses.

The COVID-19 lockdown has taught us lessons that we will need to incorporate as part of our daily lives going forward.

One such lesson is going back to the basics of financial independence “Savings”.

Followers of my write-ups will acknowledge my constant admonishing of keeping a portion of our income in a savings instrument. I will, therefore, want to use this opportunity to take us back to what savings really mean, why we need to save as well as enemies of savings.

Savings for the purpose of this discussion is “Disposable income that is not consumed by immediately buying goods and services”.

That is deferred enjoyment of your income.

In everyday language, savings is the money you have plans for and decide not to use it for anything today. Savings is a very difficult habit to cultivate and as such, there is the need for some basic facts to be learned. Saving is only possible with Discipline!

Every genuine saving habit first starts with a bank account.

No one can efficiently claim to save without a bank account where either daily, weekly or monthly income can be deposited or “hidden” for future enjoyment.

We all have goals and dreams in life, which are mostly futuristic.

Most of these goals can be realized with money and as such, we must plan our lives well today towards that goal. Some of these goals may be;

  • Buying or building a house
  • Purchasing a car
  • Education
  • Traveling
  • Retirement package
  • Marriage etc
  • Survive a Pandemic in our case COVID-19

An effective formula is a Savings=Income – Expenses.

What most of do and call savings is Income-Expenses= Savings.

we spend an appreciative part of our income and only pretend to save what is “leftover”.

That is the Lazy Man approach!

Saving money in a mathematical sense means the addition of income.

So an income of GHS 500 for June 2018 can be added to another GHS 500 in July. This may bring your total savings to GHS 1,000 for the two months.

In as much as this may be a good initiative, it still lacks the spark of excellence and wealth.

To create wealth, one may decide to graduate from savings to investment.

Investment is simply putting money into something with the expectation of gains.

That is the use of money with the hope of getting more money.

The Holy Scriptures captures investment in Matthew 25:14-30 when Jesus Christ used the parable of the three servants with talents.

Savings can only deliver you from Egypt to the shore of the Red Sea.

It, however, cannot help you to cross. Investing your savings is the key to crossing the Red Sea.

An investment that will lead to riches is one that is done regularly for long periods. Every investment has an element of risk so do not take unnecessary risk with your money. When you put your savings to work, we call that Investment.

Before you think of investing your savings, the following factors must be looked at thoroughly:

  • Yield(returns)
  • Safety of investment
  • Liquidity (ability to convert an investment into cash)
  • Time Horizon (period of investment)

Before we tackle the factors, I want to touch on some few benefits of Savings;

  • It helps to prepare for a future need
  • It makes your money work for you ( Fixed deposits)
  • Can provide startup capital for a business
  • To meet unexpected expenditure in life(family security)


  • Lack of budgeting(planning)
  • Peer pressure/Lifestyle
  • Impulse buying
  • Poor health living eats up income
  • Excessive travelings
  • Societal perception/expectations
  • Lack of funds due to overspending
  • Lack of trust for financial institutions
  • Lack of knowledge of investment

We have no excuse today when it comes to putting a portion of our income for a future good.

Some employers are struggling to pay salaries whiles others are laying off staff.

Prepare yourself today for that future which is closer than before!

I wish everyone a wonderful and memorable week!



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