I didn’t start saving till I was twenty and I started by putting coins into a tin. Then, I moved on to saving in a bank account. Saving seemed like a way for me to prepare financially for large expenses- like going on a holiday or as a backup for tight times. My mindset on saving changed while listening to a podcast where Arese Ugwu, a personal finance expert spoke about how saving can help with generating income. This helped me understand that saving isn’t just a way for me to store money for experiences or purchases that depreciate or end the minute the experience is over. For example, the money I spend on a holiday ends once I return from the holiday. Meanwhile, I can invest in property or other assets that can generate income.
This doesn’t mean I won’t spend part of my savings on a holiday or on other things. It’s just that now I plan to allocate my savings in a way that adds value to me financially and I can still have treats from time to time. Saving requires that I control how I spend. I created a budget for the first time over Christmas and failed at following it but I hope to try again. Having a mental budget is what I run with now but I want it to be more concrete. In the mean time, I’ll remember that “there’s rice at home” so as to control my spending on takeaway or eating out.