Stop creating excuses to spend whatever you earn  

If saving has ever faced any difficult time, it can’t be worse than now. Covid-19 has devastated incomes and taken away jobs.

Economies across the globe, especially in Africa, are holding onto straws. It will be long before they will walk out of the puzzle. But even as everyone struggles to survive, it is at times like these that your brain should be working overtime.

The brain should not only over work when it comes to earning money, it should also search for ways to find a balance between spending and saving.

Saving is perhaps the easiest way to accumulate capital but it takes sacrifice and sometimes pain.

Ordinarily, saving seeks to deliver two things - capital for a new business or enhance an existing or prepare one for retirement.

However, because many people in Africa and Uganda in particular, consume whatever they earn, saving becomes a very complicated arrangement. Actually, the situation has been made worse by Covid-19.

According to Bank of Uganda, the number of working Ugandans who save reduced from 18.1 percent in 2019 to 16.3 percent in 2020.

The drop means that during the period, the number of people who save dropped from 3.07 million to 2.77 million.

The low saving numbers, notwithstanding Covid-19 disruptions, has been a long standing issue and continues to present a number of challenges such as expensive credit, especially in the banking sector.

Therefore, whichever reason you might want to put forward, it is important that you sacrifice a little and save if not for old age, for business capital or enhancement.

Martin Nsubuga, is the Uganda Retirement Benefits Regulatory Authority (URBRA) chief executive officer.

Indeed, he concedes that Covid-19 brought about liquidity distress thus creating an excuse for many people not to save.

Some people, he says, could have genuinely not been able to save but others just choose not to even attempt.

“The distress affected many people’s immediate and future needs. Many are now thinking of food, health and living bills. However, because we are now seeing some recovery, our hope is our people will remind themselves of the need to save for retirement and perhaps business capital,” he says.

Nsubuga also argues that since 2014, there has been a noticeable growth in the number of savers.

For instance, he says, by 2014 people saving for retirement had grown to about 1.9 million, which was just 14.2 percent share of the 13.9 million national labor force.

The growth had continued to be manifested throughout the years until 2020 where there was a contraction.

To achieve this, Nsubuga says, it has not been because so much has changed but it has been due to sacrifice, discipline and continued sensitization.

Stakeholders in the financial sector led by Bank of Uganda annually celebrate World Savings Day, which seeks to build a strong foundation on which the savings culture in Uganda can be based.

While Covid-19 has tested world economies and personal incomes, when viewed from a different angle, it has presented opportunities which Barbra Teddy Arimi, head of marketing and communications at National Social Security Fund (NSSF), believes we can use to build a better society.

“Postpone spending on luxuries and instead commit a reasonable portion of you income to saving,” she says, but notes that whereas everyone understands that there are needs that need money, you should not look for ways to spend whatever is left.

“When you receive money, first take off a percentage for saving before you spend,” Arimi says, noting that many do it the other way round: “First spend and then save what is left.”

Many Ugandan savers, save through mandatory schemes such as NSSF or the government pension scheme.

However, there are some other vehicles through which some savings have been realized over the years.

These include occupational scheme, investment clubs, Saccos, individual savings accounts and group savings accounts, among others.

However, Arimi notes that it is always important to “enroll into a disciplined saving scheme to help you reach your saving goals”.

Misleading messages

You might already have come across videos of people encouraging their virtual audiences to spend whichever money is not enough to solve their problems.

Funny or joking as it might be, this is sad in every sense, more so in a country that is struggling with a low saving culture.

Some have even gone to the extent of telling others to stop seeing a bag of cement every time they think of going out to “enjoy.”