Savings is that part of your income you keep away for a financial need or project, it’s a culture that everyone should cultivate, it’s also a great tool for economic development because if everyone can cultivate the habit of savings you will be able to meet your financial needs, because poor savings leads to recession, we have talked about how well to save and manage your money, however there also are wrong ways to save money too, and I will be sharing them with you today.

1.There is no provision for emergency funds: This a fund that you can easily access when there is an emergency, it should be put in a liquid savings account, where it can be easily accessible and gotten quickly. A lot of us do not take cognizance of emergency funds when saving money, for instance if you decide to save 10,000 Naira every month from your monthly income, and you put the money in a fixed deposit/ or an account that you will not be able to access until a certain period of time, you should also put away some money aside in case of emergency, for example health or unexpected medical expense, or your car breaks down. I have had such experience before, I put my saving in an account that I won’t be able to access for the next one year, I did not make provisions for emergency fund, so an urgent family need came up, and I could not access my money, I had to borrow the money from a friend, the lesson point here is always have an emergency fund that you can easily access, have some money set aside for the unexpected.

2.Saving your money in a savings account: Putting your saving in a savings account is not profitable, the rate of return is not so good, because the interest rate in a normal savings account is very low, it’s about 2% which is quite low. There are some accounts you can put your money that will yield good interest for example Diamond bank’s High Interest Deposit Account (HIDA), Access bank’s target savings account, with an interest rate of 5% which is quite good, you can also put it in a fixed deposit account, bank money market savings account, it has a variable interest that could increase as your savings grow. Another beautiful thing about this account is that you won’t be able to access the money until you have reached your savings goal, which will prevent you from making unnecessary expenses. The lesson point here is to save your money in an account that will yield you a good interest, let your money work for you.

3.Keep track of your spending: You need to keep track of your spending regularly, do a regular revaluation in order to know whether you are over spending or not, for instance you budget to buy a new dress for N3,000 and you end up spending N6,000, you need to watch it and make adjustment, one way I think you can do this is to cut down the budget of another item you need to get so that you don’t over shoot your budget for the month or over spend, in that way you are still on track, avoid spontaneous buying and stick to your budget.

4.Not spending your money: It’s a good thing to cut down unnecessary spending and cut down your expenses to save effectively, but you should not leave out the necessary ones like on your basic upkeep, such as buying food rich in nutrients, doing regular medical check up, servicing your car in due time, not skipping your insurance payment, some people think the best way to save money is not to spend money, the fact is that you will get to spend more money when there is eventually a damage. You will spend more money on hospital bill just because you refuse to eat food rich in nutrient, you will spend more money buying a new engine for your car just because you have refused to service it regularly…so you see, it’s good to cut cost but not on necessary things.
Going for low quality products: Most low quality products are cheap, in other to save money most of us will prefer to buy such products, they will need replacement after few months of using it. When I was in the university when I am preparing for a new session, I would buy like 3 sandals, they were cheap and had low quality, within few months of wearing them they got bad, so I had to keep repairing it or replace them, meanwhile I had a roommate who got a more quality sandals and she never had to repair hers or replace them.. Looking back now, I realized I had spent more money…he he
Shop for value not price…you get to spend more money on maintenance, for instance you want to buy a generator or washing machine and you go for a less quality one, after a while it breaks down and you spend money on repairs upon repairs.

5.Saving what is left: When you spend and save what’s left you get your expenses paid, when you save and spend what is left your savings goals are met.

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