Key Steps to a Consistent Saving Habit

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Part of the challenge you will need to tackle about saving is how to make it a consistent habit. Not that you can't take a break if you must, but when you lapse into such interludes, you risk not bouncing back and that could put paid to your effort. Besides, even if you are able to go in and out of it, you'd probably lose a lot of the opportunity to grow your financial standing, just because you permitted intermittent breaks. The way to go is therefore to remain as consistent as possible. Indeed, you should do everything you can to steer your saving plan into auto-pilot, meaning that a lot of the process happens automatically, without requiring you personal intervention, and where possible, without allowing you access to the income pool.

What practical measures can you implement to achieve this auto-run or something close to it? Well, here are a few tricks that you may try, if you have the opportunity to put them to work:

• At-source Deductions
  If in employment, getting the employer to slice off a decent part of your wage at source is the sure-fire way to ensure that this part of your income doesn't get into other uses. The employer must however be willing to deduct and remit to a savings channel you have selected. The problem is that your employer may not be ready to take this extra trouble, which certainly is not an obligation they owe you. The exception is however with statutory deductions, and important here is the pension fund contribution. Given the current structured system that is operation, there is no reason you shouldn't exploit it to full advantage. Consider loading up on your pension fund, beyond the minimum contribution rate, provided you are comfortable with your PFA and the Custodian that holds the assets. If you are not, get a sound team to work with - you have options.
• Bank Standing Orders
  Whether in employment or not, this will work for you. Your bank will gladly transfer funds on standing order basis, to a savings fund you choose, either domiciled with the bank or elsewhere. This includes transfer to an institution that can manage or invest the funds on your behalf. This ensures the regularity of saving that you want to achieve. If you time such transfer to hit your account at salary or inflow time, it easily takes off that portion from what you can access.
• Group Contributions
  A lot of people find this arrangement useful to force a chunk of their income out of their routine spending grip. In offices, for instance, groups of friendly staff get into an understanding and issue cheques that make an individual the beneficiary each month, often adding up to a large sum. Whether you collect early and continue to retire it or contribute and receive later, the effect is to leave you with a saved chunk of money in one month. Other months within the cycle are contribution months. The only problem here is the informal nature of this arrangement and the risk that somebody could drop out due to loss of job, death, or other exceptional factor. If you are to participate, ensure the right safeguards are in place.
• 'Up-front' or Lump-sum Payments
  When you have the opportunity to choose to receive part of your income as a lump-sum, it's a good way to save, so go for it. Take the lump-sum, put it to good work and live lean on the reduced monthly inflows that will follow. If you choose not to and elect to receive your full pay on a monthly basis, the odds are that you won't show sufficient discipline to set aside a regular savings.
• Soft Loan Approach
  Got access to a soft loan? That could be another vehicle for putting together a lump-sum and compelling a spending cut. A soft loan will invariably cost far less than you can earn by effectively managing the funds you collect. So, go ahead and take the facility, lock in the funds away from your spending fingers and go ahead to face the challenge of compulsory repayment. In effect, you have compelled yourself into a saving process.
• Account officer Management
  Okay, the above-listed options can't work for you? Then try creating an account relationship with a relevant financial institution. Get them to assign you an account officer who follows up each month to get a cheque that goes to your savings or investment account. This way you have a monthly reminder. The risk is that this leaves control in your hands, as you may find reasons to opt out in any given month. The account officer may also fail to show up.
• Sign Up for a Scheme
  Any scheme that involves a regular contribution will help you save. You could commit to a regular contribution to a mutual fund, for instance. An insurance-backed scheme with monthly premium payments? Shop for options of contributory schemes that will compel you to put in some money, month in, month out.
• Commence a Project
  If you cannot accumulate some savings, create a project to which you will continue to plough in money. A housing project, for instance. This is not like creating a savings fund, but the impact is similar on your finances - you are shielding some income from recurrent spending and putting it where it works for you.

Any of these options could help you 'automate' the process of saving some of your income, ensuring you commit an amount monthly or at some other interval. You may still think up other arrangements that introduce some regularity and compulsion into your saving process. These will help you move forward with your design to institute a plan. Doing so is important for the reason that getting into a habit of regular saving is difficult for many people and, if you don't deliberately compel it, your success will won't be assured.

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