1. By Dr Farouk Kurawa Director, Agricultural Finance USAID MARKETS II SAVINGS FOR A SECURED FUTURE

2. LAYOUT Introduction What is Savings? How Much money should be saved? Where can money be saved? How to begin saving money Ten best ways to build the saving habit of saving money Conclusion

3. Savings is that portion of income not spent on current expenditures. Because a person does not know what will happen in the future. Money should be saved to pay for an unexpected events or emergencies; an individual car may breakdown, water dispenser could begin to leak, or medical emergencies, accident could occur. Without savings, unexpected events can become large financial burdens. Therefore savings helps an individual or family become financially secure. WHAT IS SAVINGS

4. Lack of savings create slavery in a society and makes people dependant on others Money can also be save to purchase expensive items that are too costly to buy with monthly income.Example; purchasing an automobile, paying for vacation, buying a property, sometimes even payment of school fees, taking care of either marriage or burial expenses etc. these can all be accomplished by saving a portion of income SAVINGS Cont.

5. To be considered financially secured, an individual or household should save at least six months’ worth of expenses. For example, if you have monthly expenses of N20,000; you should have N120,000 in savings at every given time. To do this, you may have to device a means of % savings Short-term credit, defined as credit extended for 12 months or less, including pre- and post- harvest financing, financing of accounts receivable, and inventory financing. HOW MUCH MONEY SHOULD BE SAVED?

6. WHERE CAN MONEY BE SAVED Some savers place their money in a jar at home, especially in the villages for a short period of time. (kids too); long term savers are encourage to use safer methods of savings. It is wiser to save at a deposit monitory institution. A depository institution is a business that offers financial services to people, such as ; savings and checking accounts. Unlike money kept at home which could be lost to fire, burglary, or some type of disaster, money stored at a depository institution is protected from loss

7. WHERE MONEY CAN BE SAVED Cont’d Depository institutions offer accounts that earn interest, allowing customers to take advantage of the time value for money. The time value of money means money paid out or received in the future is not equivalent to money paid out or received today. Individuals may earn interest on money saved A savings account is an account with depository institution that holds money not spent on current expenditures. Money can be kept in savings account until the owner needs to use it for emergencies or to purchase expensive items.

8. HOW TO BEGIN SAVING MONEY To help a person choose saving over spending money, pay yourself is popular and very effective saving strategy that can help individual’s choose savings over spending money. Paying yourself first means to set aside a portion of money for saving each time a person is paid before using any of the money for spending. To successfully practice the pay yourself first strategy, a person should set personal goals. Setting goals helps a person to choose save rather than spend money. A goal is defined as the result of something a person intends to acquire, achieve, do, reach or accomplish

9. TEN BEST WAYS TO BUILD THE HABIT OF SAVING MONEY Set a Goal; do you want to own a house, do you want to be financially independent, do you want to get out of debt? Set a Deadline; set a date by which you want your goal achieved. Write both on a piece of paper; put somewhere you can be looking at it Track expenses; you probably have an idea of how much you spend, but unless you keep track of every kobo that idea may be inaccurate at best Analyze Costs; check where your money goes. Reduce or remove costs. The first time you analyze your expenses can be shocking. The more the better. This is your first wake up call

10. Cont’d Make a Budget; Calculate how much money you need for: feeding, rent, bills clothes leisure etc. remove cost from income Pay yourself first; make the first bill you pay each month the one to your savings account (unless you are in debt) Earn more/save more; save a fixed percentage may be 10%, 20% etc Think savings; if you have money left at month end, save it. You don’t need to spend everything you earn

11. Cont’d Wake up – you need to understand why you buy things. Do you buy to; impress people? To be part of the group? To fill other’s expectations? Next time you buy anything, ask yourself why? What are the real motives etc Read Get Rich Slowly; your environment influences your personality, and thus your habits. If you want to build the habit of saving money, surround yourself with people who save money. Get Rich Slowly is a good place to start

12. Thank you