Having the habit to save money should not be tough. Your savings is the amount you decide not to spend on consumption. This means your savings is the balance after deducting your consumption cost from your disposable income. Your savings can be funds set aside for savings account, fixed deposits, buying of treasury bills or savings certificates, savings in pension funds and buying of government bonds etc.
Savings is a strategy to differ consumption or spending till a future time. Since the future is not guaranteed, it is a smart idea to put some money aside for the future.
You should be mindful of the fact that the rate of inflation can affect your savings. Your savings can actually lose value if the rate of inflation exceeds the rate of interest on your savings. You should endeavor to invest in securities whose rate of interest is higher than the prevailing inflation rate.
A person living his life without savings is like one who believes he will not die some day. Without savings, you are putting your lifestyle and existence at a very great risk.
For a lot of people, saving money is the most difficult thing to do in life. They spend their monthly salaries or earnings till the last kobo every month. They simply live from one pay cheque to another. The truth is that no matter what you earn, you can save something. The excuse that your monthly salary is lean so you cannot save is not tenable at all. If you are earning N10,000 every month and you cannot save, there is a very high tendency that if you earn N1 million monthly, you will also not save.
Ways to save money
Carpooling is a way to share car journeys. You find people who travel to the same place with you every day, and you all take turns to use your own individual car to take the group of people to work every day. Instead of all the members of the group driving their individual cars to work daily, one member of the group takes everybody to work today, while another does the same tomorrow and so on. If the members of the group are five (5), with carpooling you will use just one car daily instead of five cars. You can imagine the savings this method will afford the members of the group.
You may also group yourself and hail Uber ride to your place of work daily.
Mr Doyin who spends N30,000 to maintain his car monthly, now spends only N10,000 monthly because of carpooling strategy. Mr Doyin can now afford to save N20,000 more monthly from his monthly salary of N100,000.
Take lunch to work
As funny as this may sound, taking food meant for your lunch from home can save you money. Aside from being sure about the hygiene of the food you cook from home, you can also save some money. Take Chioma for example, she works in a bank in Victoria Island Lagos; she spends about N600 every day for lunch. In 20 working days in a month, she spends N12,000.
The first day she tried to cook her lunch food at home; she realized that she spent only N150 for the task. This means that she will be saving N9,000 monthly if she decides to be taking food from home to her work place daily.
The food she cooks at home was even more nutritious than the one she buys from her work place daily.
Mobile Phone Bill
Dr Olutola is a young medical doctor in his mid twenties. He is an internet freak, he surfs the internet with his android phone almost every second. It is very rare to see him idle, he will always be glued to his phone wither making calls or checking the web. Dr Olutola spends about N10,000 monthly paying his mobile phone bills. He is not ready to stop this habit of being an internet freak.
After two years spending about N200,000 on phone bills, his senior colleague who is a psychiatrist advised him to use whatsapp and telegram messaging service more instead of using the direct calling service, he also advised him to stop his habit of downloading heavy materials on the phone. After several months, Dr Olutola saw that his monthly phone bill had reduced to N2,000, he also overcame his disorder of being glued to his phone always. Dr Olutola can now save about N8,000 monthly.
Cook your foods at home
Are you a bachelor or a spinster? Do you like eating out? You may need to re-consider this decision if you want to save money. Eating out is extremely expensive than cooking your food at home. Also, the food you eat outside may not be that healthy like the one you cook yourself with fresh materials and vegetables.
A young bachelor recently told me that he once spent up to N2,500 eating at canteens every day. He said he tried to cook at home for a month and he was shocked that he spent only N30,000 a month. This is a savings of about N45,000. Can you imagine this huge difference?
Yes, it is convenient to live alone; you will save yourself the problem of dealing with other people. However, if you are single, you may share an apartment or flats with people of like minds especially your friends or colleagues at work.
You can imagine you paying N1 million for a 3 bed flat in Lekki Lagos, you can share this flat with two other friends and save yourself about N300,000 yearly.
You may also avoid living in very expensive neighborhood. Yes, some believe it as a sign of status by living in very expensive areas. If you cannot afford it, you do not need to impress anybody by burning your income on mundane things.
The distance of Gbagada to Marina is almost the same distance as Lekki to Marina. However, you will save up to N500,000 annually by renting an apartment in Gbagada Lagos instead of Lekki.
Type of car you drive
While driving nice looking expensive cars like SUVs may make you feel good and on top of the world. But can you really afford to maintain it? Is your car taking a lot of money from you monthly in the name of maintenance and fuelling?
Some cars are petrol guzzlers while others are very fuel efficient. If you live in a city like Lagos where the roads are always jammed with traffic, it is a good idea to drive a fuel efficient car.
Spare parts of some types of cars are also very expensive in Nigeria. You should note this when buying your car.
Is that annual vacation worth it?
Mr. Dele is a young Chartered Accountant working in a bank in Abuja as a banking officer. While working at the bank, he had a habit of going on vacation to the United States every year. His vacation costs him about N1 million annually. He did this for 5 years before he lost his banking job. One of his regrets was that he should have saved instead of junketing the globe every year.
Annual vacation is good but if you cannot afford to travel abroad, you can go to nice places in Nigeria. There are many tourist attractions and relaxation locations in Nigeria that can wow you.
Are you a gizmo freak?
Do you have the habit of buying the latest gadget in town? As fashionable and current you think you may be, you may not know that you are spending valuable assets on things that will not really add anything to your life. This wasted money on gadgets can better be used as a save money asset.
Stop buying gadgets you do not need. I have friends who buy the latest edition of iphones every time they are released, yet they do not use up to 10% of the functions of the iphones. They just wish to show off to their friends that they have the new type of iphone in town. Who does this show off help?
Buy unbranded clothes
A lot of Nigerians have the habit of paying an arm and a leg for expensive branded clothes and attires. The truth is that you can get better clothes that are better than the known big branded ones at a cheaper price.
Why will a Nigerian earning N5 million annually spend N1.5 million on clothing yearly. I have friends who earn so low monthly, yet they go shopping for suits worth N250,000. This same suit can be better sewn by a local tailor in Lagos for less than N50,000 but they just want to wear branded clothes and show off to people.
Buying cheap and good clothes will save you a lot of money. Forbes rated billionaires buy clothes as cheap as $25 why will someone earning less than N100,000 monthly spend 40% of his income on clothing.
Use direct debit for savings
Instructing your bank to directly debit your account for a specified amount every month and put in a savings product will make you have the habit to save money every month.
You may set the direct debit instruction as 10% or 20% of your monthly salary; just decide on what is comfortable for you.
Do not leave idle cash in your bank account
Some Nigerians leave millions in their savings or current account with interest rate as low as 4%. Why will you leave huge sums of money in your bank account? It is better to put your idle funds in government securities like Treasury bills and bonds. These securities are risk free and you can earn annual interest of up to 17%.
If you have a pre-paid meter, you can better manage the amount of energy you use in your home. You should endeavor to get a pre-paid meter from your energy provider.
Nigerians have the habit of putting their lights on, they also plug things they are not using, this can make your electricity bill go up by about 30% or more. You should change all your bulbs to energy saving bulbs; you can save a whole lot of energy using this type of bulbs. At the end of the day, you will save money you ought to have used to pay for energy bills.
Buy used things
Buying used stuffs called Tokunbo or second hand is not a new thing in Nigeria. If you so much like that latest phone in town, you may consider buying tokunbo or used type of the phone. You may save money by buying the second hand ones.
Nigerians believe that tokunbo goods are better than the Nigerian used versions. Some tokunbo type of goods look like brand new, yet the price may be up to 40% less than brand new ones.
You should take extra step to avoid buying stolen goods while you are trying to buy second hand goods.
Drink less beer
Nigerians love enjoying life to the fullest. It is not uncommon to see beer parlour filled to the brim. Some Nigerians do not mind spending up to 40% of their income on buying beer and consuming pepper soup and similar food.
If you notice that you are spending a significant percentage of your income on beer, you can save money by reducing the volume of beer you drink. Drinking less beer can improve your health and make you prevent life threatening ailments like obesity, diabetes and hypertension etc.
Keeping multiple partners
This is common to men. Some men have the habit of having several sex partners aside their wives. Everybody knows that you need to spend a lot of money if you wish to be dating a number of women with the intention of bedding them. I have heard cases where men spend the whole of their salary on women. Some men go to the extent of engaging prostitutes.
You will save money by reducing the number of women you keep as partners; you can stop the habit out rightly and stick to your wife. If you are unmarried, stick to one partner.
Save money on grocery
When buying your groceries, it is a good idea to buy from big open roof market around you; you may find things like vegetables, grains and other foodstuffs cheaper there than buying from supermarkets.
Also buying your groceries in bulk will save you money and time than buying in trickles. Wholesale prices are always cheaper than retail prices.
If you smoke cigarette or you illegally take drugs like marijuana, codeine, tramadol and gum. Its time you stop. You will save yourself from untimely death and also save money.
The high effects of these drugs can make you do things you cannot ordinarily do if you are not on drugs, this may land you in prison. Save money and stop all types of smoking.
Other strategies to save money include:
Drink water instead of soda drinks like Coke, Pepsicola and Fanta etc
Get a cheaper TV/cable subscription
Visit libraries instead of buying books
Ask for discount when buying things
Stop impulse buying
Farm your own food (vegetables, grains and fruits etc)
Drink your own well water instead of buying water from outside
Buy unbranded/generic medications instead of expensive branded ones
Do minor repairs at home yourself instead of engaging artisans
Do not take loans you do not need
I believe you will practise one or several of the money saving strategies I have discussed in this article.
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