Most salary earners misunderstand a good job opportunity for ability to save more and live an improved lifestyle. But most of them forget that, monthly income without proper saving strategies, only provides comfort that does not last.
Everybody desires to save but being committed to a monthly plan has been the biggest challenge for several salary earners.
A Chartered Accountant, Mr. Peter Adebayo, explains that saving money after you collect your salary does not require magic but commitment and dedication.
“A lot of Nigerians need to understand that if they fail to save now, they will pay bitterly for it in the nearest future. If you earn N100,000 monthly and you fail to save N10,000 from it, you will also fail to save N100,000 when you start to earn N1 million monthly,” he said.
Below are some 10 ways to save money and avoid embarrassment in the near future:
It is very important and compulsory for you to keep a tab on your expenses and rate your spending habit. If you earn N100,000 every month and you plan to save 40 per cent of it, but end up saving five per cent, do not hesitate to rate yourself P8
Spell out your goals
The best time to save is when you receive the credit alert on your phone. Immediately you receive the alert, spell out what your saving goals are for the month. Writing out your goals after the alert is better because commitment level will crash if it was written before the alert sounds. Write out what you intend to do with your salary because it is just as important as the salary itself. Ask yourself, if it is achievable and when.
Rate your spending habit
It is very important and compulsory for you to keep a tab on your expenses and rate your spending habit. If you earn N100,000 every month and you plan to save 40 per cent of it, but end up saving five per cent, do not hesitate to rate yourself P8. It is difficult but possible. However, you have to keep it realistic. Always remember that you cannot save 100 per cent of your salary.
Avoid taking your debit card everyday
Taking your debit card, popularly called Automated Teller Machine card, out every day has a way of boosting your lifestyle, making you to spend more than planned. Without caution and discipline, it may lead to the bottom of the ladder (staying poor) because you will keep spending the money you have saved.
If you use savings account, avoid the debit card as much as you can. The stronger you resist the temptation to get one, the safer your savings will be. If you must use it, withdraw the exact amount without any extra.
A study has shown that by carrying your debit card with you every day, you are likely to spend 12 per cent more than you usually would have spent. The reason is simple. It is an easier way to spend money.
Attach a cost to every time spent
You must understand your hourly rate. For instance, if your net salary is N100,000 and you work from 8:00am to 4pm, from Monday to Friday, this means you work for eight hours daily, 40 hours weekly and about 160 hours every month. What this means is that you earn N625/hour.
If you need to go and see a movie, calculate your expenses. If the ticket costs N1, 500, and light meal (popcorn and a cup of ice cream/soda) costs N700, that means watching the movie costs N2 ,200, which is the same as working for three and half hours. Is it worth it, especially if it is becoming a hablt (something you want to do every week)? If your answer is yes, walk into the mall, understanding you have made a (sound) decision.
Choose your bank wisely
A lot of Nigerians choose their financial institutions based on class or who their friends will think they are. With the present state of the economy, choosing one’s bank based on what people will say and not the interest rate they offer, can be unwise at times.
Today, most of the current account holders in Nigeria have no business with one. Most of them pay Commission on Turnover every month on accounts that had not been used to transact any business for two or more years. They prefer current account because they want to be seen signing cheque books like ‘big people’. Stick to savings account if you don’t need one.
Open four accounts
Opening four bank accounts is a strategy that will work if you have extremely long-term plans for your savings. Account ‘A’ for activities (things you want and not necessarily need like shopping or hanging out with friends); ‘B’ for bills (recurring bills like airtime, rent, electricity bills, refilling the gas); ‘C’ for crisis (precisely emergencies, start with five per cent of your income), and ‘D’ for dream (dream vacation to pamper yourself, car or a long-term plan to build or buy a house.
Your savings must come before spending
Avoid saving what is left after expenses but what you have planned to spend. If you truly desire to see the balance of your savings account increase every month, you have to save first and then spend what is left.
Reside in an affordable location
Don’t choose your residential location based on where your friends or family expect you to live. If you earn N160,000 monthly, your best saving plan should be about 25 per cent, which is about N40,000. If you save that for a year, that is N480,000, you must ensure your rent is within the
range.
Don’t join the league of Nigerians that reside in Magodo GRA, a highbrow area in Lagos, when they are supposed to live in Iju-Ishaga, another area in Lagos or better still Akute, Alagbole, Ishashi, and other Ogun communities on the Lagos border, for instance.
Buying used items is not ‘a sin’
A lot of people have reservations for used items like furniture, electronics (tested), shoes and other accessories but, sincerely, is anything wrong with them? You would be amazed at how much you are able to save when you buy used items instead of new
ones.
There are several places to get these in Nigeria. Before you approach the markets, ensure you go with someone with more experience and avoid dressing in a flamboyant way to avoid paying more for less.
Create other streams of income
Making extra money by the sides help you plan better as this expands your savings. For instance, you can manage an online community for a company and earn extra cash; you could help a local magazine develop content, or use your car for
Uber.
