Editor’s Note: This article is the third in a series of sponsored posts for the Barclays Savings Challenge. Missed the first two? Part 1 and Part 2.

So you’ve identified your beliefs about money and decided to change your (bad) savings and spending habits. How do you start?

The first step for me was to address the debt I had amassed through school loans and the credit card I naively got as a college freshman. I couldn’t lie to myself that I was “saving”, when I knew perfectly well that I owed people. After reading numerous articles about how to approach debt management, I created a plan of attack combining the debt snowball and debt avalanche methods.

Let’s say Person A has a loan of GHS2000 to pay-off, but she takes home GHS1000 a month. She also has to pay back GHS150 to a former classmate and another GHS200 to a cousin. Let’s assume that after paying rent, food, phone credit and transport for the month and indulging in small delights, she has about GHS300 left. She could decide to save it, use it to clear her debt (and her conscience), or both:


Debt snowball method:

Person A focuses on paying off her smallest debts first – that would be the GHS150 she owes her former classmate – while making the minimum monthly payment due on her GHS2000 loan (let’s say GHS50). Within two months, she would have cleared the debt to her classmate and cousin, avoided any fees from missing her GHS2000 loan repayment, and saved GHS150.


Debt avalanche method

Person A focuses on first paying off the debt with the highest interest. The idea here is to reduce the amount of time spent servicing that debt because the longer she waits, the more interest she will accrue on the debt, and the higher the amount she ends up paying back in the long-term.


Jemila’s debt snowball + avalanche mélange method ( What I did):

First, I paid back the people I owed, specifically friends and family members who had been kind to assist me in my time of need. Why? I wanted to make good on my commitment to pay them back as soon as possible. My approach involved the debt snowball method in two ways – the amounts were generally smaller compared to what I owed my college and there was no interest on it. In addition, I made my minimum payments on my credit card and college loans so as to avoid any fees.


TIP 1: Going with the snowball method gets you motivated! The euphoria from clearing a debt – no matter how small – gives  you the vim you need to plough through the rest!


Once I had cleared those smaller costs, I reassessed my debt situation using the avalanche method. Here, the focus was on paying off the most expensive debt first. Between my credit card and my college loans, the card was more expensive not  just because of the interest rate and fees, but because unlike my school loan, I had little leeway for a “grace period” or deferment should the need arise. In April 2014, I closed my eyes and paid off my entire credit card balance. My income took a big hit that month, but seeing “no payment required” on my next statement felt liberating. No more strings attached, snip-snap!



TIP 2: Take some time to go through your loan statements and see how much interest you might end up paying in the long-term if you are only making minimum payments – the answer might surprise/shock you into action.


After clearing my most expensive debt, I switched from a debt-financing attack plan to a savings and financial management frame of mind. A year later, I have been able to save a considerable amount, clear a good chunk of my remaining college loans, and put some money aside towards some personal projects and a special 30th anniversary trip for my parents.


Besides understanding the importance of an emergency fund and saving for future investment, I have had to be SMART about money and financial planning – and no, I’m not trying to be cocky. SMART means having specific, measurable, attainable, relevant and time-bound goals regarding wealth creation.  For me, that meant:

  • Deciding what I would like to achieve within the year (my target savings amount and goals);
  • How I planned to go about it (the percentage of my income I would save monthly);
  • Putting measures in place to ensure I stayed on track (creating a monthly budget and preventing myself from spending above budget); and
  • Keeping my goals relevant (researching, speaking to likeminded individuals, keeping my eye on the prize).


While I have clear goals and a monthly budget, I haven’t done a good job of tracking my day-to-day expenses. I live in Abidjan, Côte d’Ivoire now, which is way more expensive than Tunis, Tunisia where I lived last year. With the convenience of tailor-made outfits and Woodin and Vlisco stores littered all over the place, my tendency for impulse buying is much higher. What’s more, I am working on various personal projects that will require considerable financial investments and discipline. Herein lies my savings challenge:

I plan to do a better job of tracking my expenses, especially since my take-home income is due to become less predictive and/or reduce considerably. I downloaded the Mint iPhone app some months back and will continue using it alongside more traditional approaches like Excel and keeping receipts– not just for myself, but also for my projects.

As Samuel pointed out some weeks back, investment is the next step in wealth creation after savings. Consequently, I will be doing some research on investment options and sharing what I learn with you in subsequent posts in this series.


“In order to beat reduction of your total money in savings account, move a bit further and get a fixed deposit account and a bit further to get investment account and bit further to own a home business or become a shareholder. You should also invest in education and training and finally invest in people. The last thing should not be forgotten when you have enough money.” – Samuel Gyamfi commenting via Facebook

Have I bitten off more than I can chew? Stick around to find out. In the meantime, here are three savings tips that worked for me:


TIP 3: Determine how much you can realistically save. Don’t lie to yourself. For instance, you could commit to saving 5% of your monthly salary.


TIP 4:  Open a separate account for your savings and request a standing order or transfer of a specific amount from your main account to your savings account each month.


TIP 5: Reduce your access to that savings account as much as possible. For instance, don’t request an ATM card or cheque book. This will mean that you will have to go to the Bank in-person – and likely sit in traffic or stand in a queue – each time you want to touch that money. These inconveniences will, or rather, should deter you.




Got other savings tips to share? Let us know what has or hasn’t worked for you.

Follow the Barclays Savings Challenge and discussion on Twitter and Facebook. Share your own experience by using the hashtag #AfricaSaves. Visit the Barclays website for more information about their savings account.

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