World Savings Day

World Savings Day was established by the World Society of Savings Banks in Milan, Italy in October 31st 1924 and is celebrated in Austria for the 90 time this year. It is intended to draw the population's attention to the concepts of saving and the conservation of resources. The Italian Professor Filippo Ravizza declared this day the "International Saving Day" on the last day of the congress. In the resolutions of the Thrift Congress it was decided that 'World Thrift Day' should be a day devoted to the promotion of savings all over the World. In their efforts to promote thrift the savings banks also worked with the support of the schools, the clergy, as well as cultural, sports, professional, and women's association.

With rising debt levels, fluctuating markets and dropping oil prices, having some money saving tips under your belt could be a lifesaver so that that when worse comes to worse, you will know how to survive a recession. Saving is an important part of financial security and is the focus of World Savings Day.Unfortunately, a recession is something beyond our control, but what we can control is how we respond and prepare for a financial recession. Taking precautionary measures to protect your finances can make a world of difference. If you have not already started saving, here are five steps you can take to save money during financial downturn.

1. SAVE AN EMERGENCY FUNDS
When the economy starts to dip, our jobs and our income can be

put in jeopardy, and it is for this reason that saving an emergency

fund is crucial when you prepare for a recession. In a nutshell, an

emergency fund is the money you have saved up for the sole purpose of helping you get through your day-to-day living during financial hardships.

Whether your hours have been cut back, you have lost your job, your

business is not making any money, or you made some poor financial

decisions, emergency savings will give you a safety net to fall back on so you can ride the wave and rmerge from the recession back on your feet. If it is possible, try to save about three to six months’ worth of your wages, so when the economy is down and money is tight, you would not have to turn to credit. Using credit as a safety net is a mistake that often haunts people for years after the fact. Most donot foresee the reality that they will need a larger income than they currently have to both repay the money (plus interest) that they borrowed during the rough patch. Tough times always last longer than you would think, so debts from these times are always greater than anticipated. Since most people are used to living on their entire paycheque, they do not have anything extra to repay this debt. So, they have to either increase their income or significantly downsize their lifestyle to afford repaying the debt at their current income level.

2. ESTABLISH A BUDGET AND PAY DOWN YOUR DEBTS
It is easy to commit to ambitious savings goals, but if you do not have any way to keep track of your expenses, you will find that it is difficult to achieve them. To keep your financial progress on-track, try budgeting out your income at the beginning of each month. Assigning a set portion of your income to all of your major expenses ahead of time can help ensure that you do not waste money, especially if you actually divide each paycheck according to your budget as soon as you get it.d your expenses.

Keeping a tight budget is a must for anyone looking to save money, but if you do notkeep track of your expenses, you may find that it is difficult to stick to your goals. Keeping a running tally of how much you have spent on various types of expenses each month can help you identify "problem" areas and adjust your spending habits to fit your budget. However, keeping track of your expenses can require a serious attention to detail. While everyone should keep track of major expenses like housing and debt repayment, the amount of

attention you devote to minor expenses generally increases with the seriousness of your financial situations.It can be handy to keep a small notebook with you at all times. Get in the habit of recording every expense and saving your receipts (especially for major purchases). When you can, enter your expenses in a larger notebook or a spreadsheet program for your long-term records. Note that, today, there are many apps you can download to your phone that can help you keep track of your expenses (some of which are free). If you have serious spending problems, do not be afraid to save every

single receipt. At the end of the month, divide your receipts into categories, then tally each up. You may be shocked how much money you spend on purchases that are far from essential.

Left unchecked, debt can seriously derail your efforts to save money. If you're only making the minimum payments on your debt, you will end up paying much more over the life of the loan than if you had paid it off more quickly. Save money in the long-term by devoting a

good chunk of your income to debt payment so that you can pay off your debt as quickly as possible. As a general rule, paying off your highest-interest loans first is the most effective use of your money.

Once you have covered your essentials and built up a reasonable-sized emergency fund, you can safely devote almost all of your extra income to paying off your debt. On the other hand, if you do not have an emergency fund, you may have to split your extra income up so that you use a portion to pay off your debt each month while simultaneously diverting some into your emergency fund. If you have multiple sources of debt that are proving overwhelming, look into consolidating your debts . It may be possible to roll all of your debts into one loan with a lower interest rate. It is important to note, however, that the repayment schedules for these consolidated loans

can be longer than those for your initial debt. You may also want to try negotiating with your lender directly for a lower interest rate. It is not in your lender's best interest to let you go into bankruptcy, so he may agree to a lower interest rate in order to allow you to pay off the loan.

Carrying high levels of debt is very risky, because a slight change in external factors could affect your ability to pay your debt. Although you may be able to manage payments now, a job loss or an interest rate hike combined with banks tightening credit limits could change that for the worse. The first step to successfully paying down your debts is establishing a budget that accurately reflects the money

coming into your household, and where that money is supposed to go. If you are not tackling your debt as aggressively as you could or worse, adding to your debt – having a budget will help you identify spending areas you can cut back on so more of your money can go towards paying down your debt.

3. DOWNSIZE TO A MORE FRUGAL LIFESTYLE
Downsizing and learning how to live frugally can be a great strategy, because if you can learn to make do with less, you will increase your savings and you won’t find yourself struggling to adapt to a new lifestyle when a recession hits. Living frugally is not as difficult as it sounds, and contrary to popular opinion, a frugal lifestyle is not

about pinching pennies and depriving yourself of things that bring you joy. Rather, it is about making conscious spending choices that reduces expenses, with minimal impact on your lifestyle. There are lots of ways you can start living frugally. If your family has two vehicles, consider reducing it to one and making use of public transit. This choice alone could save you $9,000 per year. Or, if having two cars is necessary, consider selling one of the cars for a more fuel efficient sub-compact vehicle to save on the cost of petrol or gas. You can also look into downsizing your home or apartment, spending less on groceries, and scaling back on your cell phone plan. The key is to ensure the cuts you are making are not too extreme, or it will be difficult to sustain in the future. Learning how to get by with less is the key to recession proof living.

4. DIVERSIFY YOUR INCOME
Most of us are familiar with the saying “do not put all your eggs in one basket,” and this adage could be applied to your source of income. Relying solely on a particular job for all your income has inherent risk, because if the economy tanks and you lose your job, you will also lose your only income and your ability to meet all your financial obligations. Having multiple streams of income can really help. If one income source starts to dwindle – or gets eliminated completely, you have other sources to fall back on to help keep you afloat. Diversifying your income does not necessarily entail getting a second job – in fact if your spouse is working in a different industry than you, you have some income diversity right there. However, if you would like to stretch your wings and bring in some more income you can look into many different options such as renting out a room in your home, renting out a space in your garage, or going so far a to buy a revenue property and rent it out. If you have a fairly flexible schedule you can consider getting a weekend job, and if you have particularly strong skillset or are developing one, you can look for ways to cash in on those skills. For example, if you are a strong writer you can look into freelancing articles and blog posts, if you are crafty you can sell your creations on advertising platforms. Don’t let these examples limit you, though. Any skill or talent your have could

potentially be turned into a way to earn extra income.

In addition to diversifying your income, it is also important to diversify your investments. If you have most of your money tied up

in stock market investments, an rconomic downturn could be a

fnancial disaster if all your money is tied up in one type of investment. And it’s for this reason that diversifying your

investments is key. Go through your investment portfolio and make sure your investments are spread out across different industries and even different types of assets so that when the market tumbles, your

investments won’t be as affected and your losses won’t be as deep.

When it comes to diversification, you can park your money in a

number of different investment vehicles.
• Real estate – whether it is buying a home, a condo, or even land- is a common investment that generally appreciates with time.

• Investing in stocks- especially the stock market index is a good way to help your portfolio grow, while bonds have often been a good way of bring in income. You can also consider international investments, as diversifying into other countries can also help to reduce your

vulnerability to an economic downturn.
5. SPEND ON ABSOLUTE ESSENTIALS FIRST
When it comes to spending money, there are some things that you

absolutely, positively cannot do without. These things (namely, food, water, housing, and clothing) are your first priority when it comes to spending your cash. Obviously, if you become homeless or suffer from starvation, it becomes very, very difficult to meet the rest of your financial goals, so you'll want to ensure that you have enough

money to cover these bar minimum requirements before devoting money to anything else.

However, just because things like food, water, and shelter are important doesn't necessarily mean that you have to splurge on them. For instance, cutting down on the amount that you go out to

eat is one easy way to drastically reduce your food expenses. Along the same lines, moving to an area with cheap rent or home prices is a great way to spend less on housing. Depending on where you live, housing costs can eat up a large chunk of your income. In general, most experts recommend against agreeing to any housing arrangement that will cost more than one-third of your income.

When you are having trouble saving money, it is easy to lose your nerve. Your siituation may seem hopeless- it may seem almost impossible too save up the money you need too meet your long-term goals. However, no matter how little you're starting with, it is always possible to begin saving money. The sooner you start, the sooner you can be on your way to financial security. Ifyou are discouraged sbout your financial situation, consider talking to a financial services. These agencies, which often operate for free or very cheap, exist to help you begin saving so that you can meet your

financial goals.
More importantly, teaching cildren the art of saving moneyisimperative for a country like Nigeria where a significant majority is living at or below the poverty line with disconcerting high rate of unemployment. Teaching children the art of saving evelops children and youth into productive economic citizens at an early age so that they can be contributors to the growth and well being of the society and not grow up into dependent beggarly adults. It helps students to be independent and build their dreams.

One of the reasons why many parents in Nigeria for instance, are still taking care of their adult children is because theydid not teach them early in life the rudiments of earning moneyand saving it. Saving is a skill that teaches patience, endurance and the ability to prioritize on what is important.

Research have shown that there are many adults who live on credit because nobody taught them how to save when they were younger. It is important to teach the students the art of saving so that by the time they are older and earn money, it will be easier for them to save. Financial literacy is a skill which not only arms students against bankruptcy and harmful chances, it helps students to be focused and live within their means. Financial literate students could be a tool for many families to escape the clutches of poverty as they will grow to become save managers.

The important of teaching children the art of saving cannot be overemphasized.