Positive attitude to create a culture of savings

Most of us think that we must earn a hefty income for us to have some savings after all expenditure. The truth is that there is never going to be enough money to save automatically without knowing the art of savings. Technique of savings is a good art that anyone can learn. Creating a savings culture starts with prudent financial management. The first and most important step is to get familiar with monthly expenses to save money. At first a reasonable list of monthly expenses such as house rent, transport cost, bills like electricity, gas, water, telephone, newspaper, credit cards, mobile phone data recharge, cable subscription, feeding, clothing, utilities, fuel cost for car, entertainment etc. for every month needs to be revisited. The next step is to recording and monitoring expenses manually or maybe through a mobile application just to remember costs for a month. By tracking these expenditures per month, one can adjust spending habits. Installation of a digital program or App can be a good option to ensure smart spending habits. Many citizens of first world countries use mobile app to identify nature of transactions for preparation of family budget easily. Expenditures relating to eating out, celebrating own events such as weddings, marriage day and birthdays or getting invitation from friends or relatives to attend those events, or even hanging out or visiting places with friends or family members may be revised with judicious behavior with an aim to save money.

We are a nation of spenders rather than savers. The social norm is to spend to achieve a certain lifestyle regardless of income. And this can make savings seem impossible. If we go to India for shopping, people identify us as Bangladeshi easily by observing our spending behavior. Since the Covid-19 pandemic recession, both the capacity and incentive for people to save have been reduced. We know that savings correlate to income. A lack of day-to-day income, money management skills, lack of confidence in ability to save, unwillingness to confront negative spending behaviors are considered as a great barrier to save money.

Family is the basic and best institution to learn art of saving. Inculcating the saving habit and introducing the basics of sound financial discipline to children from an early age may be one of the best responsibilities of a parent. A child can be taught to identify nonessential items and how to spend less on those items. There are many reasons why it is beneficial for children to learn how to manage money from a young age. The difference between needs and wants should be taught well so that they can understand that there is a limit for need but there is no limit for greed.

Taking children to a bank is a great way to introduce them to the concept of interest, and how savings accumulate over time when the principal amount is left unspent. Earning one’s income through hard work is one of the best ways to learn the true value of money. Encouraging children to earn money by doing a part-time job or tutoring students may help them to learn the real-life value of working and value for money as well.

Children learn by example, so the best way to teach child about savings money is to save money by the family head.  During shopping children can be accompanied to show how to discern between various prices and explain why buying one item makes better sense than another.

Reducing entertainment spending, canceling less important subscriptions and memberships, transforming buying habit to savings habit are crucial for the savers. Family budget review can identify problems, fix solutions of crisis and help to improve personal savings plan. How to save money should be understood well which may even inspire to find more ways to save and achieve goals for savings faster.

A healthy savings habit plays an important role in attaining financial freedom. A culture of savings helps better control of money and secure financial future. If there is no goal of savings, just having an idea of savings money does not work. One of the easiest ways to get into the habit of savings is to set up some automatic method of moving money into savings plan.

The motivation for savings can be worked well if there is a sense for future security of life style. Small habits can bring big difference. Energy-saving measures, such as turning off lights and shutting down computers at night, using laptops (because laptops consume 90 percent less energy than desktop PCs), are the best ways to save energy costs. Installing motion detectors to control lighting in frequently unoccupied area, such as restrooms, using solar light to reduce electric bill, installing low-flow shower-heads and faucet can reduce water costs. Using reusable cloths, napkins instead of paper towels can simply save money by washing and reusing the same cloth napkins. Before renewing existing car insurance policy each year, checking out the rates of competing companies may save a lot.

People save more successfully when they set a short-term goal. For instance, committing to savings taka 200 a month for 6 months is much more attainable that setting a goal to save taka 1000 a month for a year. A habit of savings for short period may motivate for setting new goal. Only motivation to save money can avoid purchase of expensive or unnecessary items. Marketing emails and texts from the stores may be unsubscribed. Credit card report may be checked for free once a year. Credit card auto payment system ensures that they are paid on time, in full to avoid late charges.

A neighborhood swap meet can be organized to buy and sell clothing, books, and school supplies, toys, etc. to avoid buying of new items. Designating one day in a week a "no-spend day" and reserving one night in a month for free family and friends fun to cook at home to avoid dinner in a restaurant culture will give an excellent opportunity to save. Savings without making lifestyle changes can be quite easy if we adopt a positive and acceptable culture of savings in a society. Social attitude needs to be positively changed to a saver that he is not eating or consuming all now rather he is keeping some portion of his earnings for his own future or for the next generation to consume. If societal attitude still remains unchanged– looking at a saver as a miserly person– then it is really very difficult to adopt a culture of savings.

Savings are very essential for every individual and each and every individual must have the habit of savings which benefits the individuals in many ways in the near future. This attitude of savings not only develops an individual’s wealth but also develop the country’s wealth which gives a great progress in the development of the economic status of a country.

The writer is a former Senior Secretary and currently teaching as Adjunct Feculty at the Bangladesh Institute of Governance and Management (BIGM)". He can be contacted at s22arefin@gmail.com.