Numerous Ghanian households find themselves just one crisis short of economic hardship. Despite this reality, many individuals lack funds set aside for unexpected situations. Without an emergency fund, families frequently resort to unanticipated loans simply to manage daily expenses, ultimately facing steep interest rates that reduce their long-term earnings.

Akweley Laryea, who leads retail banking at First National Bank, states that numerous households might prevent such circumstances by discussing finances more freely.

It goes beyond merely managing expenses; it involves establishing a mutual comprehension and strategy for your family’s financial matters.” She explains. “This begins with open discussions regarding each individual’s income, outstanding liabilities, concerns, and future goals.

However, such discussions aren’t always straightforward. Some individuals are raised in environments where financial matters were never talked about, while others may have anxieties related to borrowing money. “It’s quite typical for one partner to take on the emotional burden of handling finances, whereas the other person steers clear of the subject completely,” explains Akweley. This lack of communication can frequently result in misunderstandings or suspicion, particularly during emergencies when there isn’t an agreement between both parties regarding their approach.

She suggests reserving consistent time, even as infrequent as once per month, for a financial review to establish a family budget and determine collectively how you’ll manage savings, expenses, and unexpected situations. Akweley added that these unforeseen circumstances are often where many households face difficulties.

Many individuals possess fewer than six months’ worth of funds set aside for emergencies, and some have completely none saved up. This puts you at significant risk when encountering unexpected expenses and lacking financial reserves.

She highlights that establishing an emergency savings account is the crucial initial action in developing financial stability.

“Saving as little as GH¢200 or GH¢500 every month regularly can lead to significant improvements over time. Gradually work towards setting aside enough money to cover at least three months’ worth of basic needs and continue increasing from there.” The main objective is developing a steady saving routine, so begin with an amount that you find easy to set aside each month without interruption.

She further suggests maintaining an emergency fund in a distinct account that is readily accessible yet separated from daily expenses. “For instance, First National Bank’s Savings Pocket connected to your checking account is an effective method for saving during crises as it prevents unplanned expenditures.”

After establishing an emergency fund, couples can begin to focus more earnestly on additional objectives, such as setting aside money for educational expenses, a vehicle down payment, or retirement. It is here that having knowledge of various time frames becomes beneficial.

There exists a method to align the product with your objective. A family planning for holiday expenses in December shouldn’t commit that funds to a five-year investment; instead, they could attain their aim through a medium-term investment offering adaptable maturity choices, like a Flexi-Fixed account or a 32-day interest-plus plan.

If your focus is on the long term, you may be able to assume slightly higher risks to gain greater returns through one of First National Bank’s Fixed Deposit options. Some individuals confuse these products, leading them to save insufficiently or withdraw from their long-term investments prematurely, often resulting in extra fees like penalties,” explains Akweley.

“This goes beyond safeguarding your finances; it involves eliminating a significant source of disagreement within your relationship. Crises are challenging enough without adding concerns about covering expenses—thus, some preparation and a solid financial teamwork can make a big difference,” summarizes Akwelely.

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