Savings…… 1st Step is Identify a Purpose

A happy new month to you all our dear readers, it is our hope that you in a financially sane state of mind, if you’re not, don’t worry, we believe you will overcome and live to testify of the greatness of the almighty hand of God.

Let’s continue practicing the safety guidelines stipulated by MOH & WHO, wash your hands as many times as possible with soap & water, or use a sanitizer, don’t touch MEN (mouth, eyes & nose) as much as possible, observe the 1.5-meter rule anytime you’re in public and lastly wear a mask the right way (cover nose & mouth).

Welcome to this month’s topic, this one is interesting and we’ll are bound to enjoy, and take a minute to distract ourselves from the pandemic that is threatening our lives and think creatively.

As usual, let’s start with the known definition of the term;

“Savings is the amount of money a person has leftover when they subtract their consumer spending from disposable income over a period of time”, this is basically a summary from the many definitions available.

This is correct, but as usual, we have to spice it up here, today we choose to change something small from the above definition if you remember in our last month’s budget template article, we deducted savings before the expenses…….., that’s where we want to base our talk.

Savings is the amount of money deducted on the net amount after statutory deductions in the case of employment, or the amount deducted on the net amount after production cost or cost of sales, in case of a business. Generally saving should be applied to the net amount that is deposited to the bank account from an income, not considered upon surplus amount after bill payment.

All we want is to enhance the culture of savings hence why we’re considering savings as being of primary concern, that way it becomes an every income activity commitment and not a lucky surplus activity, as will be the case when it is considered after expenses.

For this to be effective it must have a drive, a motivation, hence purpose.

Why do you want to consider saving? Why is it necessary? Why should you save?

There are so many reasons as to why you should consider saving as a primary concern, could be buying a home or a car, could be to enjoy some good holiday getaway, could be to get back to school, could be to start a business, could be to buy a piece of land, anything, just sit down and ask yourself what is it I would do if money was not a problem for me, make that a motivation, why you’ll consider saving for yourself.

But allow me to share how I started my saving culture………………..

December 2014 I resigned, we had staff welfare where we had some money allocated for investment & this each member was entitled to their share in the case that they left employment and as we held our annual AGM at the end of the year I was rewarded my benefits. I had no idea what to do with this amount so I just banked it and let it sit there. Came January 2020 I knew without a doubt that I would use this money for nothing tangible as I had no job, and the fact that together with a group of my friends we were leaving for our annual holiday (just a hint end of January is the best time to holiday, we’ll discuss this on another day, today let’s talk savings), and I knew that this money being accessible to me was a temptation that I would lose to. I want to do something that I would later say this is what I did with my ‘staff Sacco’ payment. But not having an idea where to invest I walked into an investment company for advice and option (this was a mistake, I learned a couple of years later, in next month we’ll discuss investment decisions), was given options and made my decision on what to do with half the amount as the other half was for my holiday. This is a brief summary of how I started my saving culture, and as I write this the “so not wise” investment I did is still going on and I’m still faithful in my contributions.

Now since then, a culture for saving was born in me, my motivation until 2018 was saving for fun moments, for leisure, this worked so well for me when I had a reliable source of income whether it was employment or when I went full-time consultancy.

This commitment may be threatened if and when you have no reliable source of income saving becomes so hard because you’re on survival mode, all you want to achieve is to ensure you make ends meet.

Now, this is where I learned that the motivation for saving need be bigger than just a good time, the motivation for savings need to be intertwined with your personal life goal or purpose, motivation for savings need to be something more substantial, that way you have to figure out how to fulfill it, just the same we figure out how to pay our daily bills.

Another thing that a savings plan needs for a beginner is an accountability partner…… (This will be our next week talk, because it is literally the best way to ensure that you start the saving culture and stick to it, because backsliding is so easy when you’re doing it alone, next week we talk about who this is supposed to be), then after it has become part of you then you can choose to keep them or go on your own.


Make your saving purpose something that is attached to your personal life goal that way you will feel the guilt of not honoring it as it will mean you are self-sabotaging.

Mbugua & Associates.


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