Tips to kick-start your savings
There is something worse than being unemployed and broke, it is being employed and broke. Mostly, this is due to a poor saving culture especially among young people.
A 2017 GoBankingRates survey found that a growing percentage of millennials (people aged 27-37) have absolutely nothing saved.
Tony, a Nigerian millennial was utterly disappointed as he gave his bank statement for August a cursory gaze. Tony could not remember buying anything extravagant recently but somehow, he does not seem to know where the money was going.
Tony had made a commitment in January 2020 to save a minimum of N1 million, but except something miraculous happens, there is no way he will meet this commitment, he thought to himself.
Tony was smart enough to set a goal at the begin of the year but he did not have a saving plan. Truly, Tony had not been a bad spender, he even conquered the pressure to buy the latest PES 2020, a football simulation video game that most of his friends got this year but he was a poor planner.
The coronavirus worsened by other economic uncertainties have pushed prices up, so Tony has had to pay almost twice for some of the things he bought at a lesser price last year.
Saving is a necessary financial habit. The only problem is the discipline required to actually save. Many people need help to find the balance between necessary expenditure and putting away money for the rainy day
Most people used to believe they need to make more money to be able to save more but this is not necessarily so, it is more about discipline.
A savings account has its role to play in your finances and you’ll be doing yourself a great disservice if you spend all of your money without making any savings. A savings account can help me you meet short term financial needs.
Savings however requires a lot of commitment and self-control. This is something very difficult especially in the face of the insatiable needs of humans. There will always be a new I-phone, cloth, shoes and so on.
As difficult as it is coupled with the uncertainties in the economy, it is still very possible to save.
If you are like Tony, here are things you can do to enable you to save more.
Set SMART goals
The first thing you need to do is to set a SMART goal. SMART is a specific, measurable, attainable, relevant and time framed
A goal like “I want to buy a land” is too vague. A better goal sounds like, “I want to save N500,000 to buy a plot of land by December”.
It is very unlikely you achieve a goal by saying “I want to spend less on mobile data weekly”. A SMART goal will be, “I want to cut my spending on mobile data weekly by N2,000.
It is important to also set a goal that is attainable. Take a look at your budget to know what you can realistically save on a regular basis.
Record your expenses
It is important to keep track of your money habits by taking inventory of all of your expenses. This requires huge discipline as every expense needs to be captured. This will help you keep track of impulse spending or other unnecessary expenses and spend only on necessities.
Use saving apps
There are several saving apps in Nigeria that can help you save more. This apps are useful because most of them remind you of your saving commitments by debiting your account according to your pre-set option.
This is probably the most popular saving apps in Nigeria at the moment. It is designed to help you avoid spending temptations and ensure that you save without excuses as it faithfully debits your account to the tune of whatever amount you have chosen to set aside periodically.
To save better you can use the save lock option, this enables you to lock part or all of your money for a selected period of time.
The longer your money stays in the save lock, the higher interest you get.
Piggybank is also famous for imposing penalties for savers who withdraw money before the set day.
This is modelled after the traditional “Kolo”. It helps you save towards specific goals. You can download the app and select one of two savings options; ‘easysave’ or ‘autosave’. It is best to pick the autosave option, if you struggle to be consistent.
CowryWise is another app to save money in Nigeria. It was launched in 2017 and it operates by sending you prompts or directly debiting your account according to your pre-set saving option. It offers three savings options; periodic, fixed, and one-time savings with favourable interest rates at no cost. It also offers amazing interest rates on the funds you lock in.
Their unique recipe has amassed over 100,000 users in a few short years, 70% of whom are still active with Cowrywise two years later.
Sparkle is a lifestyle and financial ecosystem that helps you fulfil your potential – mobile, simple, personalised. Sparkle gives you a breakdown of how you spend your money and where you spent them. A fun and creative way of saving for different goals at the same time. Sparkle has inventory management, invoicing and tax calculation and remittance for your business. There is also a friendly chatbot as your personal financial advisor and lifestyle concierge