By Ruth Mbugua
Over the years, a lot has been said about how to develop a savings culture. We have the knowledge but yet, the rate of savings remains low. This is true especially among millenials where only 31% set away any savings from their income each month. In this day of technology, the information is readily available on the internet. We have financial experts who give recommendations from reducing eating out, carrying packed lunch, creating budgets and a lot more financial tips. But yet, we are unable to stick to the budgets even when we create them. A global pandemic shows up and still catches us off guard.
Some of the reasons we do not have a savings culture are:
- Priorities
We spend time and money on things that are important to us. If it’s a good education, you will pay fees for a good school and term it as an investment.
- Easily accessible cash
Digital lending has made accessing cash as easy as blinking. You get cash within seconds. This creates a comfort mentality that when an emergency arises, you will be able to get funds quickly which leads to a non-saving culture.
- Technology
Innovations in technology can be both good and bad. Having access to internet and mobile banking and card transactions has revolutionized our relationship with money. If you want to impulse buy, it’s a tap away. Also if it’s money you are not seeing, it doesn’t register in your mind how much you have spent on an online transaction.
- Individual characteristics
Things like childhood background, economic status, social networks have a high impact on defining our values. This may cause people to be either spend thrifts, risk averse, motivated to be financially successful among many other factors that affect their spending habits.
- Instant vs Delayed gratification
A culture of instant gratification instead of delayed gratification. In an age where a lot of things are instant, from transactions to communication channels, human beings are becoming more impatient as they are used to the convenience that innovations and technology have brought along.
What needs to change is an internal value system. This starts by doing an internal audit of why we do things the way we do, become more self aware, align what our priorities are and that will transform how we relate to money as individuals. You might not know where to start and this is where a financial adviser comes in to make the journey understandable and easier for you.
ABC Bank, being a relationship Bank, strives to be the best partner for you when it comes to saving and/or investing. This is not just about opening an account but understanding what your financial goals are and advising you of the best possible way to meet them.
Whether you are in the diaspora or in Kenya, contact them via talk2us@abcthebank.com or 0701 700 700 to get your savings culture started or on track or visit www.abcthebank.com for more information.