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The ongoing economic crisis in the country has demonstrated how fast it can take for the money in your hand to become insignificant. One minute you are thinking you can afford the whole world, then recession hits and you are burdened with how to make up the shortfall.
For a beginner, saving comes with a lot of complexities –not that they are. The challenge is you are yet to get the hang of it. It is really simple when you put your mind to it.
From the beginning, it is important to understand the difference between saving and investing. Saving means you have to put your money away in complete safety and get it all back with often insignificant interest. Investing on the other hand means you risk losing some interest and or some cash for the chance it will grow quicker if you put your money away in a business venture. So before you start, decide what you want to do, do you want to save or do you want to invest?
There are no right or wrong answer but we recommend you save first.
If you are with us, and have never saved anything in your life, you can start small. Start with N100 or N1000 depending on your income level at the moment. Pick a number that come rain or sun, you are going to achieve it. Do not try to impress anyone. Be sincere with yourself. You are doing this for you not for anyone. Most people fail in saving because they start too high, so they become vulnerable once they face a bump along the way.
Starting small means you are most likely to achieve your goal and perhaps move higher. For instance, if you plan to be putting away N1000 every week on a salary of N60, 000 in order to arrive at N4, 000 on a monthly basis, it is easier to achieve than to tell yourself you are going to save N10, 000 weekly on the same salary in order to save N40, 000.
Your goals should be practical and take cognizance of the realities of the day. To motivate you, you can tie your savings to a long term goal. Perhaps you want to save for retirement, children’s education, buy a house etc.
You can put your savings in a separate account, one that you cannot reach easily. You may consider not applying for an ATM card on that account.
Like earlier mentioned, savings require a lot of discipline. You will have to trim back your expenses. In fact, to achieve your savings goal, you must first pay off any high-interest debt. Stop comparing your life with others. Be clear about what matters to you and make sure you build a financial plan that supports that vision.
To make it easier for yourself, you can give directives to your bank to remove the target amount and transfer it to your savings account every time money enters into your account. That way you are not debating whether you should remove the money or not.
Give yourself a little reward once you hit your target. The reward can be something free. You can take a long walk, sleep earlier than you do, go sightseeing or buy a movie.
FRANK ELEANYA
