Stop borrowing, learn to save

By THOMAS HUKAHU
IN my last article, I challenged you to start saving money this year.
Set your financial goal and save regularly each fortnight to reach that goal.
I also gave you reasons why you should save.
Additionally, I stated that you should take a calculator and do some calculations.
Saving money is a numbers game, and those who regularly check their numbers reach their goals.
In this article, I shall give you some other tips to help you save better and be more motivated to do that.

Only morons borrow money
We all borrow things from people.
Sometimes that is necessary, but a lot of times that is unnecessary.
There is a time for borrowing, but a life of continuous borrowing can be dangerous.
In general, borrowing stuff from people is a bad habit.
People who continue to lose their pen or phone and asking others to lend them theirs are careless. And the more they borrow, the less careful they will become.
One of my peers, back in my teenage days, told me that he had a father who reminded him not to lose his things and borrow stuff.
The father said, “If you continue to lose things, you might lose your own life too.”
When you think about it, it does make sense.
To replace things that are lost, we will have to continue to spend money unnecessarily and as a result not progress in life.
Someone who does not save money will borrow from others, and that can be dangerous.
The Old Testament as in Proverbs 22.7 states: “The rich ruleth over the poor, and the borrower is servant to the lender.”
(This can be applied to a nation too. The lender can dictate to a borrowing nation as to what it can or cannot do. The lender can influence the borrower’s policies or even take over some its public assets.)
Some successful business people teach that people who borrow to start or grow their enterprises are doing it wrongly.
A few years ago, I heard Mark Cuban, the American mogul, saying during an interview in a YouTube video that “only morons borrow money”.
I have also heard another American businessman saying the same thing.
Among other projects, Grant Cardone works in the real estate industry. In many of his videos, Cardone tells people that most of his starting money came from him stashing money away over a number of years, not borrowing from a bank.
Not borrowing money to start a business may sound awkward to someone who is used to borrowing, but it is possible to kick-start an enterprise if you save a small amount of money to reach a certain target.
Some projects need a few thousands of kina to get off the ground, not a million kina.
Like I said in my previous article, if you save K200 each fortnight, you would save K5200 in a year.
And if you continue to save that much in four years, you would have saved K20,800.
Do the calculation to see for yourself.
Saving money instead of borrowing is a good way of remaining free from the burden that is often carried by borrowers who are constantly reminded by the lenders to pay up their debt.
And this is important to take note of if you are used to borrowing from loan sharks in your locality where they can be a threat to your sanity, as when regularly knocking on your door for your delayed payment with their 10 percent interest placed on that.

There is a time for borrowing
Before you start thinking that all borrowing is wrong, I must be fair to say that there is a time for borrowing.
And that borrowing will require you to approach your local bank, or savings and loans society, to ask them for a loan.
(I will go into more of this in my next article.)
But then, understand that most banks also ask for collateral from you, and a good savings account of K5,200 when you want a K10,000 loan would be good collateral.
Saving money regularly also adds weight to your loan proposal since banks know that people who save regularly will most likely be able to pay back their loans on time.
Savings help a lot when it comes to approaching a bank or savings and loans society for loans.

To save more, start a side hustle
If you want to save much more in a short period of time, start something on the side.
You may be working as a teacher in the week, but on weekends you can do remedial lessons in your subject area.
I used to do that with students when I have time. I charge them a fee of K20 or so for two hours to upgrade their writing skills or polish up on basic mathematics.
Last year, I met an instructor in auto mechanics who teaches students during the week but fixes vehicles for other people for a fee on weekends.
You can use the skills and knowledge that you have gained in your education to make some extra money outside of your working hours, and that money can become part of your savings to reach your goal.
Instead of saving just K5,200 in a year, you may actually save K6,000 in a year.
That is possible if start a side hustle.
 
Live simply to save more
People who live simply will save more than those who live expensively.
Trying to live simply would mean you choosing cheaper products over expensive types.
Cheaper products do not mean their quality is bad though. They will perform the same function as the expensive ones, but may be less sophisticated.
Why buy the latest Apple phone when all you need is a phone that you can call someone with and send texts to?
About 20 years ago, an Indian couple taught with us in the same school. The wife once told me that when she went to do her shopping, she picked up certain items from one shop and if a packet of sugar was cheaper in another shop, she would cross over the street to get the cheaper one.
I did not understand then why one would go through that hassle to do that. Now, I do understand that.
She wanted to save money. Even if it is just 20 toea.
When we first got to Australia last year as international students, our university student support staff took us around the city and showed us certain supermarkets where one can buy basic items at lower prices.
Coles is such a supermarket and all its brands, like rice and peanut butter or even ginger nut biscuit, will always be cheaper than other popular brands.
Coles 1kg medium grain white rice is $3 and its 375 g smooth peanut butter is $1.80. Other brands of the same types would definitely be priced higher.
And wise shoppers in Australia visit Coles for most items that they want to buy.

Don’t blow up your big break
Here is something else that you should keep in mind.
From time to time, everyone gets a big break.
I mentioned in my previous article that an uncle or aunt may one day give you K500 for a birthday present.
Most young people would want to go shout their friends with drinks and food with the given money.
If you are keen on saving, maybe use K50 to celebrate with your friends, but save the other K450.
Almost everybody gets their big break at times, from either someone or their firm giving them bonuses, but most of them blow it up so quickly as in buying the latest Apple phone or spending a night out drinking in a 5-star hotel and walking about the next day with hardly a coin in their pockets.
That is unwise living.
I lived in Kavieng, in New Ireland, for three years, and I have heard stories of young men and women selling beche-de-mer (sea cucumbers) during harvest time.
Some make a lot of money. That is their big break.
Some of them use their money to buy a new boat and outboard motor, or building materials for their house.
The wise among them can also save some of that money in a savings account.
They should use their big break to advance themselves, not waste those in unnecessary things or activities.

PNG is blessed, use the
opportunities
I have lived in a country where there is almost nothing there except for breadfruit and mangos in the tree and fish in the ocean.
Yet the people on Nauru survived when their economic crisis lasted for years.
We in PNG are blessed with so many things and money is always circulating on the streets, even during Covid-19 days.
People need to use the opportunities available to make some money and save some for later use.
I end this article with a local story.
In early 2019, I was living in Kavieng and one day while walking around town, I saw white pieces of paper stuck to the walls of different shops in town.
Upon investigation, I found out that those papers had a phone number of someone who owned a taxi.
It was the owner’s advertising campaign.
I took note of the number in my notepad.
A few days later I planned to fly to Port Moresby for a few days, so I called the advertised number and asked if I could be picked up early in the morning for my flight.
Sure, the person on the other side said.
At 5.10 am the next day, two young men in a station wagon drove to where I was and I placed my bags in the vehicle and they drove me to the airport for the flight at 6am.
The owner of the vehicle was driving and his relative was just accompanying him.
On the way, the owner told me that he had just recently bought the vehicle from an expatriate who left the town a few weeks ago.
“I usually do sales at the market and saved K6,000 and used that to pay for this vehicle,” the driver said.
I was impressed.
Here is a Papua New Guinean who is using opportunities around him to go from one level of life to the other.
He did not need a bank or a government to advance his life for him. He made use of whatever opportunities were around him.
He saved his money from his market sales to buy a second-hand vehicle and now he is running that as a taxi as a businessman.
Working hard and saving what you earn can help you advance yourself financially.

Next article: When to borrow, and your superfund contribution