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Saving with the hardware store: How I bought building materials in instalments
The writer built this house by opening an account with a hardware store and kept depositing money for building materials until he could begin construction. Photo by Edgar R. Batte.
What you need to know:
One of the ways to start your own building project is to open an account, and begin depositing with a reputable hardware store. It ensures you are focused on building your house and you also eventually save a lot of money.
Think again. There is an option you have not yet exploited. Like you, I didn’t earn big but had the same dream- to build a house. Talking to friends helped and one pointed me to the option that helped me start on this dream.
How it started
While chatting over how hard it could be to build a house, a friend, Balaam Barugahare told me I did not have to have millions to start and in fact I could open an account with a hardware shop. This was in 2009. That afternoon I had Shs150, 000 on me and he offered to drive me to Hardware World in Ntinda.
As is the case with the bank, I opened up an account, only that this time I needed just my identity card (ID). The cashier was kind to explain to me how all this works.
I could deposit money onto this account and attain a receipt for it. So I deposited the Shs150,000 and got a receipt which I folded and pocketed. She explained that whenever I got some money, I was welcome to deposit, the beauty being that I could keep these receipts and present them at the point when I was ready.
Win-win
And even if the price of cement or paint or any item went up, I could still get these items at the prevailing price at the time I deposited the money. It is a win-win situation for both you and the hardware shop since you get to save and then you provide them with capital. Besides this is a non-interest accumulative account.
The items that I was afraid would cost me a fortune were cement, doors, window panes and roofing materials, so I requested that that these items be reflected with these deposits. I bought a paper file and filed each of these receipts.
The hustle, the sacrifices
To make considerable savings, I resolved that I would use one month to pay rent upfront, for four months so this would enable me make significant savings in the subsequent months.
This alone was encouraging. I found myself saving between Shs800,000 to Shs1.2m monthly. This of course meant that I had to make a few sacrifices. I checked my spending and this worked wonders on improving my financial discipline.
Before, I would go out four times a week and spend about Shs80,000 per outing but with the new commitment I downsized my outings to Saturday and even then still had a good time out on a budget. I began visualizing what my money would buy me in terms of building materials such as bricks or bags of cement.
Strong support system
Normally when I start out to do something I shared with two people, my big sister and a friend and the former was willing to offer me Shs700, 000. I kept my focus. Slowly I got a few private assignments given that I also do photography.
By the third month I had managed to accumulate receipts worth Shs4.2m which I was aware was enough to afford the average rich guy an outing but was glad was going to get me about 120 bags of cement. The savings kept steadily growing which was good encouragement to keep depositing.
Contacting the contractor
I began to consult with a man who had been recommended to me to help me with the construction. I asked him to get me estimates of the costs of materials I needed for a two-bed roomed, self-contained house that had space enough for a kitchen, bathroom, sitting room and a pantry. His estimate ranged between Shs38m and Shs43m.
The figure was high but it did not scare me. I told him we could adjust a few things. He told me when I was ready we could talk. I went on with my saving scheme. I contemplated taking out a loan but this meant that I would have to pay more which would naturally slow me down.
The plan
I envisioned that I would build my house in three phases. I would start with the foundation then build it up to the beam level. I would then roof it and then begin on fine-tuning the interior.
I saved up to March 2011 and called on my contractor and told him that I was fairly ready to start on construction. He came with an exercise book with my names on it and told me that he would document every item we bought in it.
The real work
There was some preparation that had to go in clearing the land since here were some old rentals on the land. I documented every step of development on the land for memories sake. My heart leapt as I saw Shs8m sink into the foundation and a few inches of brick level from the ground. And up it went up to the beam.
At this point I began paying out of pocket for labour per week and my contractor as willing to sometimes work on credit. His patience earned him my respect. Besides if he had to build to a certain step but materials were not enough he was willing to buy them and credit me. He called it ‘his house’ too, and told me he was surprised that I did not choose to buy a car but build. His words were encouraging too.
Moving in
When he had roofed the house, plastered the interior and put in the window panes I felt it was fairly habitable and one midmorning I called him informing him that I was to shift and stay in my house.
He was shocked. He told me there were no window panes. I told him that I needed to save the money I was paying in rent so we could afford these window panes. I began staying in the house and the Shs350,000 I was paying in rent would actually do a lot.
I paid the painter Shs400, 000 to paint the whole house, bought the paint for about Shs1m, plus the window panes in the subsequent two months.
Ongoing work
I then went on to tile it. I have just contracted a plumber to fix a shower cabin, sinks, pipes to the septic tank, taps, toilet and he has charged me Shs1.7m for the items and the labour.
The fence is the high expense venture for now. It could set me back by about Shs6m but I began by constructing a foundation to use it to permanently map off the land.
You may take out a loan but you do not necessarily have to unless you have good reason to. You can start humbly, with a good focus. And you do not have to drain or strain yourself financially. When I look back, I am proud of the job I have done and I am thankful for Barugahare’s tip
You can start by saving in manageable amounts and as your savings grow you will be encouraged on. Even as I finish this one, I am already thinking of rentals so I can turn this into a commercial plot and move on to another piece. You don’t have to be rich to do something before you turn 30.
