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If you live in Nigeria, you will almost certainly be impacted. And unfortunately, it may be near-impossible to totally escape the effects of soaring prices. However, there are steps you can take, starting now, to minimize your exposure to the worst of the coming costs. Here are some of those measures, discussed in no particular order:
Work with a Budget
If you haven’t previously been using a set budget for your weekly or monthly expenditure, it’s time to begin doing so. If you work with a spending plan, you’ll be better able to track the costs you incur, detect unnecessary expenses, and cut them out. Monthly budgets should do for salary earners and middle-class entrepreneurs. But if your income comes in irregularly (say, daily), you may settle for weekly budgets instead. Just do what you can to stick with them.Make Bulk Purchases of Essential Food Items
Your move to cut costs should include making bulk purchases of staple food items (rice, beans, cooking oil, etc.). Larger quantities of foodstuff will be less expensive than smaller ones, when both these are compared at the unit level. Buying bulk items will serve you even better if you’re able to do this just before everyone gets wind of the petrol price hike. This way, you’ll save a lot on food that’ll last you a while—hopefully until prices begin to stabilize at their new levels.Draw Down Your Naira Holdings
This may seem counter-intuitive at first (aren’t you supposed to have more money at your disposal now that prices are shooting up?). But it’s actually good advice if you have a significant amount of money saved up—in naira. It’s likely that rising costs will slash the real value of your cash by half or more, rendering your savings worth far less than they did just a couple of days ago. If you want to preserve as much of the value of your money as you can, consider holding more of it in foreign currency. Apps like Bamboo, Rise and Trove offer interest-bearing dollar wallets and accounts.Sign up for the Connect Nigeria daily newsletter
Move Cash to Value-Yielding Assets and Ventures
There’s something else you can do with idle naira: convert them to value-generating ventures or assets. This could mean anything from adding to your business’s inventory to purchasing a plot of land (to name a couple of examples). The idea here is to stay invested in something with a value that you can adjust upwards as prices increase everywhere else. This way, you’ll retain a lot more of the original value of your money—at least significantly more than you would if you just left cash lying in a bank account.Pay Your Rent Upfront
If you have the leeway, try to pay your rent upfront. The benefit of this is obvious: you won’t have to worry about the substantially increased rental fees that your landlord will charge you when the next payment is due. Hopefully, this will give you enough space to breathe before you’re able to adjust your income to meet up with the new price levels across the economy (there’s more on this adjustment shortly).Trim Your Energy and Transport Expenditure
You can expect energy (read: petrol) and transport costs to rise first. But you don’t have to get battered by the full force of these price increments. Some measures you can take to reduce the impact of these costs on your pocket include: only embarking on longer journeys if they are important; only using your power generating set when it serves a really useful purpose; considering using a bicycle for shorter trips; and (for longer-term benefits) switching to alternative energy sources (e.g. solar).Seek Out Extra Income Sources
It’s probably time to take up one or a couple more side hustles, just so you can keep paying your bills. There are a lot of options you can choose from. You may put your existing skills to good use with a side-gig; or learn a new skill that’ll enable you to provide an in-demand service, for which you’ll be paid. You can also earn from the property you own, e.g. picking up passengers with your vehicle for a fee, or renting out chairs and tents for events.Register to attend the CN Business Mixer
Final Words
With the subsidy on PMS gone, we can expect the prices of most products and services to soar. This will translate to a rise in the cost of living, a challenge that most Nigerians dread. But you can reduce the impact that this will have on you by taking the steps we’ve discussed in this article. Featured Image Source: Vanguard NewsDid you find this article useful? Contact us: editor@connectnigeria.com
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