So it’s the end of the month and you have received your package 😉 You’re excited because it’s time to buy all you set your eyes on. For some others, the money has already been spent because there is a waiting list of foodstuff, beauty products, house maintenance and not to forget family members who are standing by counting the days until the month end like you promised. Or perhaps you are owing and everything has to go to service the loan, and then you have to borrow again to survive the month until the next salary and the cycle continues.
It is time to end this cycle and develop a saving culture. It’s not impossible. Here’s how:
Here are a Few Reasons You Should Save
- Open a savings account: A savings account is a deposit account type that attracts an interest, but the interest rate depends on the bank. Ensure you have a savings account that has no ATM card attached to it. As you discipline yourself not to go for the money kept in that account, the interest would begin to build monthly. No matter how little the interest is, it’ll motivate you not to spend the money in the account. As soon as you get paid, transfer a designated amount to that account. The bank also limits the number of withdrawals you can make from it.
- Set goals: Make up your mind to save at least 20% of your monthly salary. This will go a long way in building a habit of saving. Don’t do this towards the middle of the month, rather do it as soon as you are paid.
- Join a contribution team: Locally called Esusu, a contribution team is usually a group of about 5 trusted people who come together to contribute a certain amount of their salary monthly. They decide on who takes the first contribution up to the last. For instance, if a contribution of N50, 000 is agreed, everyone would pay the first person N50,000, which would come to a total of N250,000. It continues in this sequence until it gets to the last person. This is always a great way to save, but please do this with people you can trust.
- Set priority: The minute you step out of your house, everything you see out there; at the malls, in the streets, etc., are targeted at your pockets. So it’s essential that you set your priorities right and differentiate what you need from what you want. There is a significant difference between a need and a want. Food is a need, another red shoe different from the type you have at home is a want. Don’t go picking everything you see, be deliberate about getting what you need. Not that you should not spoil yourself when you earn it, just ensure you set your priorities right.
- In case of emergencies.
- To pay fees and bills.
- To be financially independent
- To buy a house
- To buy a car
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This article was first published on 4th November 2017