Money decisions before joining a savings group

Mar 07, 2019

Money is a tool that facilitates development when properly harnessed. What should women look out for before joining a saving group?

FINANCE SAVINGS

Money has a language of its own. A statement like money rules the world is common when people sit down to discuss money.

Money is a tool that facilitates development when properly harnessed. What should women look out for before joining a saving group?

For Clare Seruwagi, a mother and business administrator residing in Mutundwe, she together with a group of friends begun saving. She explains, "The most important thing that l considered before being part of the group is financial discipline of my friends. Also the issue of all of us having a steady cash flow was vital.

I was comfortable saving with my friends because at least l know them. Together we agreed on the amount of money to save that is comfortable for all of us. However, as the savings group grew we decided to have it registered as a limited company.

Through this savings group we have been able to create a stronger bond beyond just economic opportunities. We meet once a month to socialise while reviewing our savings.

However, this has not come without challenges. There are times when some people do not deposit on time. Others in the group pull out when they fail to pay."   

Drawing from Seruwagi's experience, a recollection of my trip to the lovely countryside in Lira when l met women and men in the rural areas bringing their money to save to alleviate poverty. I met them during one of their weekly meetings whereby they would bring even sh5,000 weekly to their savings group which has a structure with a treasurer.

Under the guidance of National Union of Disabled Persons of Uganda (NUDIPU), these people with disabilities have proper books of accounts to keep record of what money  comes in and what is borrowed. Some of these groups opened up bank accounts so as to ensure safe keeping of their savings instead of keeping the money locked up in a member's home which would attract thieves.

With retrospect, it is clear regardless of what one earns saving is a good habit to adopt. There is never a right time to start saving you just have to start states Clare Oparu, an economist.

With today's economy, to ensure personal development occurs SACCOs have come up and some people pool money with family and friends at a smaller level. Although saving is a good habit here is what you need to know before deciding who to save with.

It is more than money. This is what Dickson Mushabe, CEO of Hostalite in Naalya, Developers of investment and SACCO software, keeps tracing when it comes to choosing who to save money with.

KNOW WHO YOU SAVE WITH

"Many people's true colours come out when the money comes. The way they walk and relate with people changes when the big money comes. Are they going to remain the same when the sh1b hits the account?

Observe how they handle personal money do they have integrity? You need to really know the people you choose to save with to avoid such situations," he explains.

Investment requires a trust element better save with people you know. This will especially apply when choosing a circle of friends and family to save with.

Our money habits define us. Is your circle of friends the kind who are broke on pay day because they have to pay off debts? This means that such a person will not have money to save. These habits are vital to consider when looking out for whom to partner with on your journey to save money.

GOVERNANCE STRUCTURES IMPORTANT

There must be rules. You need to have a common agenda as to why you are saving. Where you choose to put your savings goes beyond money.

Be careful to know whether the circle of friends you intend to save with pay back when they borrow. Are these people who do not pay banks? You need to know them because sometimes personal sentiments kill investment clubs. Remember this is a long term investment.

There is need to work out an arrangement on how to deduct the money for savings. For instance; if the SACCO is for the workplaces the money is deducted before it is sent to your account.

SAVE WITH LIKE MINDED PEOPLE

Lilian Katiso, an accounting gardener blogger based in Kyanja observes, "It is key to know the vision, mission, objectives, strategies and activities of the SACCO. If you do not subscribe to any of them then do not join.

It is vital to know the Sacco members. Are these people you would want to identify with? What the governance structure is like are the office bearers members of good repute? Then what is the legal structure of the SACCO, the operational and financial management systems need to be in place.

Finally what are the bylaws, policies and procedures? It is important to have knowledge of these details before joining the SACCO."

Clare Oparu, an economist also concurs with the previous experts that one needs to choose like-minded people because you need to have a common goal. She adds, "Be part of the group whereby when money is distributed and paid it will be clear regarding the money structure. This information should not be privy to just a few members but everyone in the group."

REGISTER THE INVESTMENT CLUB/ SACCO

So when should one register the savings group? "Some small savings groups do not register however, as the savings increase and the group grows it is important to register so as to enjoy business benefits like having a business account," Oparu observes.

If you are to trust people with your money it is wise to have the savings group registered so that you are able to deal with challenges legally incase someone run away with your money. This ensures that it is easier to sort out the conflict.

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