Cutting back is the theme of the hour. We save water, heating costs and power. It’s no longer so easy to indulge yourself. Or is it?

I still believe that this is the best time to do some good savings! When costs are high for most products and services and disposable incomes are at their lowest. An interesting trend has occurred over the past few weeks with banks reducing their rates from between 21% and 19% to between 19% and 18%.

However, the lending rates are still at their highest with some banks maintaining between

28% - 25% therefore confirmation my previous pronouncement that Ugandan lending rates are still the highest considering the regions averages.

It is not all gloomy, even with this gloomy picture painted by economists, scholars and the press we can still make the best out of it. The reality is that this situation will get worse before it gets better but it will get better. Authorities in personal finance have proposed that “it’s more fun spending savings than saving spending”.

The real question is which side you would rather be caught at considering that every crisis is eventually overcome. For the speculators this might not be the best time to consider foreign exchange products as they at their highest. And for those worried prospects there is a lesson to learn some where.

For most of the second half of 2008 and some part of the first quarter of 2009 we experienced foreign rates at their lowest coming close to 1600UGX for 1USD but over the past few weeks we have witnessed a more than 45% increase to about UGX2, 165 per 1USD. These means for those who speculated this trend and actually invested in foreign exchange products about the period mentioned, the gains were tremendous and they laughed all the way to the bank!

It is upon this background that we need to consider putting aside some funds in form of savings. There are many products in the market that can give you a favourable return on your investment. Most banks have introduced bonus savings accounts which give between 8% - 12% interest on savings and the interesting thing is that the costs on managing these funds are minimal.

One bank for example has an investment account which offers 12% return on investment. Other products include the super savings account which gives a monthly return on investment of 3% with charges only when you withdraw. A financially prudent person is informed about the existing products and all it takes is a little bit more research by contacting your bankers and reading various literatures available at most bank outlets.

The best way to increase your savings is automatic transfers which can be done by instructing the bankers to create standing orders to the investment accounts. There is never a small amount to start with when it comes to savings. I remember one individual telling me that he started with UGX50, 000 the equivalent of USD40.00 for twelve months; his bank balance was bigger at the end of the period by UGX600, 000! Indeed small wins and discipline lead to big wins!

When you start out like this there are a lot of lessons to be learnt. First you are developing a culture that never existed at all “the culture of savings!” and two you are growing your wealth!

And finally, I can still indulge myself irrespective of the economic crisis. All I have to do is look for ways to cut down on major spending whereas maintaining a favourable and sustainable lifestyle.