Rethinking our spending habits

A good number of people, including outsiders, have in the past made a few comments on our spending habits, and I wish to add my voice to theirs. We as Rwandans have a propensity to spend big even when we are drawing on very meagre resources. It is obviously pleasurable to spend big when one is earning big, but the problem arises when one has to outstretch him or herself to the limit just to feel big, to satisfy one’s ego or simply for ostentatious reasons. Our spending, or rather overspending culture manifests itself in many areas, but I shall mention just a few, such as the strong, almost perverse liking for big expensive houses, huge flashy vehicles and very expensive weddings. I am of the opinion that we Rwandans tend to overspend on housing. A fellow who happens to be a middle income earner takes up a loan of well over one hundred million francs to build a five or six-bed roomed residential house for his small family of say four people (husband, wife and two kids). This is by no means a small loan, and he will probably pay it back throughout his lifetime or thereabout. Another one chooses to live in a house whose rent is more than half his net salary earnings. If this is not a skewed way of spending then I do not know what is. According to ILO (International Labour Organization) recommendations, the maximum amount of money an employee is supposed to spend on housing (mortgage or rent) should not exceed 30% of his or her total net salary earnings. However, the truth in most cases is that the majority of salary earners exceed this level. In one East African country where I lived for a long time, most young graduates just out of university usually rent cheap, modest but decent houses. This they do so as to be able to save for a home of their own at a later stage. At an early age, a young couple usually takes up a mortgage scheme immediately after marriage, forsaking a honey moon and other non essential expenses. In some cases the husband takes up his scheme and the wife takes up hers. By the time they are in their late thirties, they already own two houses free of any loan, this way they still have a long time at their disposal to venture into more productive income generating projects. In our case, it is at such age that our youth start thinking of owning a home. The argument here could be that there isn’t enough housing to go round in our country. Although this is true currently, still it is high time we tried to change our attitude towards our spending options in this area. Another area of concern in terms of overspending is weddings, although here we as Rwandans could aver that we share this characteristic with our brothers and sisters across the whole continent because nearly all Africans have a penchant for big expensive weddings packaged with a whole set of expensive receptions and dinners, utopian decorations, exotic music, traditional dances, long boring speeches (the latter in the name of culture), etc. Do we really have to invite all our former classmates/schoolmates, all our clan mates, all our colleagues at work . . . the whole world? Why can’t we have small or average-size weddings and save money for more worthwhile and useful things? Why should a young man and a young lady from a humble background wish to have such a big wedding, wasting a huge amount of money in just a single evening? I am made to understand that some people even go to the extent of taking loans in order to finance their weddings. This is crazy. It is crazy indeed because instead of embarking on a long journey of building a firm home, the couple starts an arduous one of indebtedness. Then there are the famous jeeps or SUVs or four-wheel drive vehicles, the guzzlers. Most of us who go for these monsters rarely leave Kigali for upcountry, yet the hilly, rugged terrain is the reason most of us advance for buying these vehicles. No, it has nothing to do with our roads; instead it has in most cases a lot to do with pretentiousness, especially given that a good number of us really have to strain ourselves to afford them. For those who can afford them, they are fantastic machines and a beautiful sight to watch on our clean, nice roads, but for those many that have to outstretch themselves, I would advise them to go for cheaper, mid-size SUVs and small cars. I believe that we should try to build or buy affordable, modest but decent houses and drive cars that are well within our reach because I do not think that there is any dignity (Agaciro) in living beyond one’s means. We tend to spend big amounts of money that could be used as a start-up for income generating projects, which, if successful could later make it easier for us to buy what we want, be it a beautiful house or a nice car, rather than seem to be inverting our spending priorities. One way of reaching our much cherished goal of middle income status by 2020 is to prioritize our spending by putting our money in productive ventures, thereby generating income and broadening our tax base. This way, we would create more jobs, thus raising our standard of living and our purchasing power and enhancing our local market. We should seriously rethink our spending priorities. To this end we should also strive to inculcate in our youth the virtues of thrift and modesty so that they grow up knowing how to prioritize their spending.