You might be dreaming of having a financially secure future. It’s a wonderful dream, but maybe you look at your current situation – living paycheck to paycheck – and you think, a dream is what it will always be. Well, you’re not alone. Saving money can be tough, especially when it feels like expenses are piling up left and right.
But what if I told you there are some easy and practical options to start saving in Tanzania? Or even better, what if I told you there are saving options with interest rates that can grow your savings significantly over time?
Let’s dive to the bottom of this article and you’ll be amazed by the possibilities of turning your finances around. You will not only have the knowledge of how to save, but also how to make more money from your savings.
This is how you do it:
Automate Your Savings
Let’s face it: sometimes, we’re just not disciplined enough to manually set aside money every month. That’s where automation comes to the rescue! Many banks in Tanzania offer an automatic transfer service known as a standing order. For example with CRDB, you can fill up a form so as to be registered with this service.
This allows you to schedule a fixed amount of money to be transferred from your checking account to your savings account whether weekly or monthly, whichever frequency you are comfortable with. It’s like a sneaky little savings fairy doing the work for you while you sit back and watch your savings grow effortlessly. How cool is that?
Embrace the Power of Budgeting
Budgeting may sound dull, but trust me, it’s a game-changer. Take some time to sit down and evaluate your income and expenses. Look for areas where you can cut back, like those impulsive shopping sprees. By setting a realistic budget and sticking to it, you’ll free up extra cash that can be diverted to your savings. Remember, it’s not about depriving yourself entirely but finding a healthy balance between spending and saving.
A budget tells your money where to go and what to do so that you can have the life you want.
Tania Brown, Certified financial planner.
Join a Savings Group
In Tanzania, we have a long-standing tradition of “chamas” or savings groups. These informal groups of friends, family, or neighbors pool their money together and take turns receiving a lump sum. It’s a fantastic way to save because you’re held accountable by your peers, and there’s often a social aspect to it as well. So, gather your trusted comrades, set some ground rules, and start your very own chama. Together, you’ll build a solid savings foundation while strengthening your community bonds.
Explore Digital Savings Apps
In this digital age, why not let technology lend you a helping hand? There are numerous digital savings services available that make it easy to save on the go. Check out popular ones like Akiba and M-Pawa, and see which one resonates with your saving style.
Track Your Progress
Tracking your progress is an excellent way to stay motivated on your savings journey. Whether it’s through a good old-fashioned spreadsheet, a budgeting app, or a simple notebook, keep tabs on your income, expenses, and savings. Make it a habit to review your progress regularly. Seeing those numbers increase will not only give you a sense of accomplishment but also encourage you to keep going and saving even more.
Saving money doesn’t have to be a daunting task. By incorporating these simple options into your daily life, you’ll be well on your way to financial stability and peace of mind.
But why stop there when you can make your money work for you? If you’re ready to take your savings game to the next level and potentially grow your wealth, consider exploring investment options like fixed deposits, UTT AMIS, stocks, and bonds.
It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.
Robert Kiyosaki, Entrepreneur.
UTT AMIS
UTT AMIS, short for Unit Trust of Tanzania Asset Management and Investment Services, is a popular investment option in Tanzania. It allows individuals to pool their funds with other investors and invest in a diversified portfolio managed by professional fund managers.
UTT AMIS offers different funds tailored to various risk profiles and investment objectives. By investing in UTT AMIS, you can benefit from the expertise of investment professionals and potentially earn higher returns than traditional savings accounts.
With UTT AMIS’s Umoja fund you can start investing as low as the amount that equals the sale value of 10 units; which is roughly around Tzs 10,000/= depending on the market. What makes it even more practical is that after setting up an account with them, you can easily buy units using mobile money services such as M-pesa, Tigo Pesa and Airtel Money.
Stocks
Stocks, on the other hand, represent ownership in a company. Investing in stocks means buying shares of a company and becoming a partial owner. Tanzanian stock markets, such as the Dar es Salaam Stock Exchange (DSE), provide opportunities for individuals to invest in listed companies.
Investing in stocks can be more volatile and carries risks, but it also offers the potential for significant returns. Before diving into stocks, it’s essential to research the companies you’re interested in and seek guidance from a financial advisor.
Fixed Deposits
Fixed deposits are like the reliable, low-maintenance friends of the investment world. So, here’s the deal: when you put your money in a fixed deposit, you’re basically lending it to a bank for a fixed period, and they pay you interest in return. It’s a win-win situation!
Fixed deposits are great because they offer a guaranteed return on your investment, which can be especially comforting if you’re not into roller-coaster rides in the stock market. Plus, they’re pretty straightforward to set up. You just need to choose the amount and the tenure that suits you best.
Take Tanzania Commercial Bank as an example, you can deposit as low as Tzs 100,000/= as a starting amount, and a shortest deposit duration of up to 3 months. After your tenure ends, you get to withdraw way more than you deposited because the bank offers a competitive interest rate at the time of maturity.
Bonds
Bonds are another investment avenue worth exploring. Bonds are essentially loans issued by governments or corporations to raise capital. When you invest in a bond, you’re lending money to the issuer in exchange for periodic interest payments and the return of the principal amount at maturity.
In comparison to stocks, bonds are considered to be lower-risk investments. This does not mean they can’t provide you with a stable income stream. Apart from various corporations, the Tanzanian government issues bonds that you can invest in.
Whether you choose to explore UTT AMIS, dip your toes into the world of stocks, or consider bonds as part of your investment journey, always remember to assess your risk tolerance, and make decisions that align with your financial goals.
By combining smart saving strategies with well-informed investment decisions, you can maximize the potential growth of your wealth. Just remember to start small, stay informed, and be patient. Investing is a long-term game, and it’s crucial to have a well-rounded financial plan that includes both saving and investing to turn that financial dream into reality.
