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Savings Tips

If saving is so important, then how come a large number of people don’t do it?

People cite a number of reasons why they think savings are hard to accumulate. These include:



I barely have enough money to feed my family and pay for other basic necessities.

Start setting aside something, even if it is only a very small amount, every day or every week. The amount will grow.

Look hard for ways to cut unnecessary expenses.

When I save, my husband always asks to use the money I have saved.

Keep money in a secure location, preferably out of the house so it is not accessible. Open a bank account.

My income is irregular.

Save different amounts each time you earn some income.

I must use all the available earnings to pay off debts.

Make a schedule to pay off the most expensive debts first.


While basic principles of money management can apply to everyone, decisions to save or consume depend very much on your level of income, access to loans, access to appropriate savings products, and personal discipline. Nevertheless, there are a number of rules of thumb that you can use to guide decisions about savings and consumption:

  • Save as much as you can as soon as you can. The more you save, the better off you‘ll be.
  • Save as you earn. Try to save 10% of your income even if you don‘t have a specific purchase or investment for which you are saving.
  • Pay yourself first—put 10% of your earnings aside for savings before you do anything else. If you can‘t afford 10% right away, start with less, but save something.
  • Calculate how your money can grow over time if you save regularly in an account that earns interest.
  • Don‘t carry a lot of cash—avoid temptation to spend it!
  • Spend carefully. If you purchase big items, consider how much you could resell them for. Look for opportunities to save money by bulk buying of non-perishables.
  • Pay off your debts. Some people recommend paying down your debt before you start to save; others recommend saving even while paying down debt because it is important to begin building assets as soon as possible. This choice will depend on individual priorities, situation, and means. Total household debt should not exceed 36% of household income.
  • Keep three to six months of living expenses in an emergency fund at all times. It can be used in case of job loss, unexpected illness, and to meet other emergency needs. An emergency fund will reduce your anxiety.
  • Keep emergency funds in a separate account. Open two savings accounts—one for emergencies that is easy to access and doesn‘t have any penalties for withdrawal, and one for savings for other goals that is harder to access (and therefore less tempting to withdraw the money).
  • Keeping some savings out of reach is important.
  • Find savings products that match your savings goals.