Here Are The Benefits Of Enhanced Saving

The recent outbreak of covid 19 pandemic affected the financial well-being of many Kenyans with many citing layoffs, reduced work hours, salary cuts, and overall less income. On a positive note, more people now acknowledge the benefits of saving.

Saving not only provides a financial backstop for life’s uncertainties but also increases feelings of security and peace of mind. Some of  the benefits of enhanced savings include:

Financial Back up

Emergencies hitting along will not feel difficult to deal with since your savings will cushion you from the unplanned crisis. You may also want to help your loved ones in various areas such as helping in paying school fees for their kids, meaning they will be able to benefit from some of the money you have saved while ensuring that your own needs are taken care of.

Inflation

Every day, the cost of living is becoming a little bit more expensive, and most people cannot sustain their lifestyle. It might not be easy to fulfill your life expectations if you do not have enough savings.

Peace Of Mind

Sometimes we usually ignore the peace that comes with financial stability. You will not be worried about any future financial turmoil as you step into the new phase of life. Neither will you be a bother to family and friends when you are not working. When you have enough savings, you will have a sense of financial independence and freedom without compromising your dreams.

You can avoid debt

Debts are the biggest enemies of progress. A person who has no a saving plan may be burdened by uncountable debts. This is because it may be difficult to manage their daily needs on a reduced income. But the good news is this can be avoided if you start saving as early as possible.

Unfortunately, Kenya’s saving culture is the worst in East Africa falling at 12 percent way below Africa’s average of 17 percent. This is half the average for low-income countries (26 percent of GDP). By contrast, neighboring Uganda and Tanzania have already crossed the 20 percent mark even though their per capita income is significantly lower.

Various factors have been blamed for Kenya’s poor saving culture among them a high spending power. Others include poverty, inadequate financial education, and a limited range of available financial incentives.

To address this, president William Ruto has in the recent past been advocating for an increase in the contributions Kenyans save to institutions like the National Social Security Fund (NSSF).

As Such, the Fund increased total contributions for both employees and employers to 2,160 shillings monthly from 200 shillings in line with the NSSF Act No 45 of 2013. This followed a court of appeal ruling that termed the NSSF Act of 2013 legal, after months of clashes that delayed the implementation of the Act. Under the Act, NSSF seeks to build a bigger retirement package for workers.

With the Act currently being implemented, NSSF has expressed confidence that the current development on savings is a significant milestone and a big win for Kenyan workers. Although many are against the move, it might be the right move towards ensuring the future of Kenyans is secure.

Related Content: An increase In NSSF Contributions Will Enhance Your Savings And Secure Your Financial Future