What is savings? Saving is referred to as economizing, cutting cost, or to rescue someone or something. In terms of personal finance, Saving refers to preserving money for future use. Typically by depositing the money in a bank or storing it up in a piggy bank [in some cases] this is distinct from an investment where there is an element of risk.
The main motion of Savings is coming to terms with the fact that a time will come when you will have needs to meet but will not be earning or have an income. You should therefore use the time when you can make an income to raise funds for the time you have no income.
The real fact is Saving money is never possible without income, so whenever there is an income no matter how small make sure there is a saving. This write-up is not about making money so I won’t be telling you how to make money instead I will be telling you how to save money and also be able to store away more from your life style.
So when is the right time to save? It’s actually now because you have enough money to start saving and also you want to learn how to save that’s why you’re reading this blog post.
The first step to a financial freedom is to Live Within Your Means. As far as possible do not make credit a part of your life, many live 120%- 150% of their earnings i.e borrowing, salary advance, loans etc most times this monies are spent on irrelevant things. As the saying goes, “Cut your cloth according to your Cloth size”, always be content. It is also very important not to spend to please others, because they sincerely don’t care about you, even if they do and you don’t spend your money on them they will only get jealous of what you have spent on.
It’s not what you earn but what you can save that determine your financial success in future. Take the bold step TODAY and take charge of your finances. Take personal responsibility for your finances and stop apportioning blame on small income or expenses that are avoidable
Saving is actually paying yourself. It is arguably the hardest discipline in personal finance management but if your dream is lifelong poverty then generously pay the landlord, taxis, supermarket, school, friends, and please don’t pay yourself (i.e. save)
The best way forward is to start by saving what you can afford, do not be over ambitious. You might start saving a huge amount and give up shortly. The discipline is more valuable than the amount, once you have developed that discipline you can now increase the amount.
When you have been able to discipline yourself then you start to save for a reason, when you save for nothing in particular , you end up spending the savings for nothing in particular. You could save for many reasons for phone, for car, for land, for rent, for house for investment for retirement etc. however you must make sure you save when it makes financial sense. Don’t try to be too ridged or become penny wise pound foolish. For instance a loan investment might be lower than increase in cost of land/house over a period of saving, in such a case do not save for land/house. Take a loan and buy the land/house and repay the loan. This is applicable to other well thought of investments but remember do not live on avoidable credit.
A good step to take is also to close the money leaking tap. Some people fail to save because many avoidable expenses cloud them or they are simply impulse spenders.
Try to put your savings where you can’t touch it, If you do not trust yourself with keeping your savings then put it far from your reach eg open an account do not request for a cheque book or debit card and when its big enough you can put it in a fixed deposit but not with an individual that is way to risky.
Do not forget to have a healthy/reasonable balance in life, why eat once a day at a roadside buka and wear a N500 shirt because you are trying to save and yet your income is about N1m per month? Or why eat three square meal a day at a five star hotel and wear a N30,000 shirt because you earn N1m. To know how much to save you need to be able to strike a reasonable balance.
The best way to save money is not to lose it, consider some of these below and see how much savings u can get eg
- Using energy saving bulbs in your house they use less energy and lasts much longer and produce less heat saving you the extra energy cost from running a fan/Air-conditioner at all time.
- Turn off appliances when not in use this saves you a little amount of money. it only works if you use the digital or prepaid electricity meter in Nigeria
- For long personal calls that are not time bound why don’t you consider off-peak periods?
Plan how much you want to spend before you embark on any spending or expense. Why rent a N1.5m house when you earn N2m??
There are so many more of such unnecessary and wasteful spending check your life style then gradually cut down on them.
Do not necessarily increase your spending after an increase in income make sure you increase your savings and if necessary slightly increase your spending.
A key to your financial success is to make your money work for you, *never say never* a kobo today is worth a naira tomorrow. Make sure you are not a pay cheque away from poverty.
Thanks to Alfred Brian Agaba for Sharing.
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