What Do You Have In Your Hand? A Kobo Or Your Future?
“The principles of wealth are true regarding large amounts and small amounts. It all begins with the smallest unit of currency.”
That's according to Hendrith Smith.
That quote summarizes how essential savings is. If you earn money, no matter how little, you have been empowered to create wealth.
Whoever you end up becoming tomorrow – poor or rich – depends on how you manage what comes into your hands today.
That 100-naira, 200 naira or 1,000 naira left in your purse has more power than you think.
It could play an influential role in the kind of financial future you have tomorrow.
Some people think their earnings are so insignificant they can’t keep anything away. But nothing could be further from the truth. No amount is too small to save.
Here are 6 tips we have prepared to get you started on the journey to creating wealth by starting to save today.
1. Track Your Income & Expenditure: Savings begin by getting a grip on what comes in and goes out. It is difficult to take something aside when you don’t even know what comes in and what goes out.
Also Read: There's A New Way To Save Money In Nigeria
So, the first step towards saving is to understand how much money that comes into your hand every month and how much you spend.
Once you have determined this, save and then spend from what is left. In that way, you can afford to save a sum that is reasonable without compromising on your daily needs or overspending on things that you don’t need.
2. Make It Difficult To Spend Your Savings: Where you save your money is as important as how much you save.
If you save your money in a place you can easily reach it, then it is as good as not having a saving.
This is because it is hard to resist the temptation of going to take the cash once you are hard-pressed for some.
So, your best bet would be to save in an account that you don’t have a debit card and the bank’s branch isn’t close to your home.
Or save in a savings app such as Piggybank where you would be forced to pay a penalty for withdrawing before the permitted date.
3. Zero In Your Balance: Zeroing in your balance implies ensuring that your account balance evens out.
“Every day, you make a transaction and your account can read something like 49,375 naira at the end of that day.
"What you can do, is take out that 375 naira and save it. That way, you don’t get to even feel that you have removed money from your account, because the money has already been evened out in your mind,” explained Joshua Chibueze, Co-founder of Savings App, Piggybank.ng.
4. Plan Your Savings: Saving is very difficult when you have several needs competing for your limited resources.
So, it's always important to plan your savings. Let's say you earn 100,000 naira monthly, always think about trying to live within that income by containing your expenses.
5. Think Twice Before Borrowing: If you have access to loans, no matter how cheap, you are likely to overspend.
If you even tried to save, you will end up using the savings to service or pay off the debt.
It is advisable to pay off your debt before you start to save or better still save towards paying off your debt.
6. Invest When You Have Met Your Target: Usually, you would have set a target for yourself. Once you meet that threshold, invest it.
If you leave it there, the interest it would attract may not provide enough buffer against inflationary pressures.
So, investing would be a better option since it would attract higher returns. But if you are risk averse, you can invest in more secure financial instruments such as government securities and mutual funds.
If you found this article useful, share it.