Good Morning Nimi,
I’m writing because I literally don’t know what else to do and I am too ashamed to talk to anyone I know about this.
I will be 30 years old in a few months and I have no savings whatsoever…not even N1! I have been living a lie for so long, giving the impression to others that all is well. I have no excuse; I have been working in a reputable bank for nearly six years and have absolutely nothing to show for it. Sometimes I save enough to go on vacation and then spend all my savings shopping. I am the eldest child. Sometimes I lend money to my parents or pay my sister’s school fees (she is in a private school and things have been difficult for my parents). Recently, I made a N240,000 contribution to my sister’s wedding. I am on 3 bridal trains this year and have spent about N50,000 on Aso-ebi for each of them. I borrow whenever I can and live from paycheck to pay check. I am always broke.
I hate my job and cannot see myself doing it for much longer…I practically drag myself out of bed each day and the thought of being away from the job, even though I am completely broke, gives me peace of mind. I know my life will be hard without any source of income but at this point I almost don’t care.
I have actually been tempted to find a rich boyfriend, as there are men who are willing to fund my lifestyle, but that is not me. I honestly need help, as I feel like I am drowning and have no way to save myself. I read your newspaper column and writing to you seemed like a good idea.
Thank you very much for your email. I am touched by your story and want you to know that you are not alone in your plight. Many young Nigerians, even those who are fortunate enough to have a job, complain that they are always broke. If you are unable to save from the N260,000 that you currently earn, it will not be any different even if you earn N1,000,000 a month. Here are a few tips to help you come out of this rut as you begin to strive for financial security.
Track your spending
I would like you to write down every single thing that you buy, for a whole month; a startling picture will emerge; you will have a clearer idea of what you need to cut back on or do without altogether. The traditional suspects are eating out, recharge cards, clothes, weave-ons etc.
Establish a budget
One of the best ways to rein in your spending when it is out of control, is to budget. List all your routine monthly expenses, and other spending, and subtract those amounts from your income. By making small, manageable changes in your everyday expenses, you can make a huge impact on your financial situation.
Prioritizing your spending is essential. The key is to begin to differentiate between needs and wants, and to be brutally truthful to yourself about what you actually need. Of course it is nice to eat out often with friends, but it doesn’t have to be everyday. If there is an item that you have set your mind on, ask yourself if you really need it.
Pay yourself first
As soon as your salary comes in, try to save at least 10%. Put your savings on autopilot. If you wait until the end of the month to see if you have any money left, there will be nothing left. Talk to your bank about setting up a direct debit from your current account to a savings account or a mutual fund account each month. This will be the foundation of your savings. It will need sacrifice on your part and will not be easy, but once you get started you will see the savings growing and this will encourage you to continue.
Learn to say no
I admire your generosity and it is a wonderful privilege to be able to support your parents and siblings. However if you are bankrupt and become ill or depressed due to the stressful situation you find yourself in, or are forced to compromise, your family will be far worse off. You cannot afford to pay for everything, and particularly not in your present financial state. Determine what you can afford and include that in your budget. Even though you are the eldest child, you have other siblings that are working and it is important to have a conversation about sharing some of the burden in caring for your parents and contributing towards a sibling’s education or family wedding. If the bride and groom and other family members cannot afford a lavish wedding then they might need to work with a smaller budget or postpone the wedding.
Choose your friends carefully
Your choice of friends can have a huge impact on your life. Try to select those who build you up, encourage and motivate you to achieve your goals. If you are constantly trying to “keep up with the Joneses” and go through life keeping up appearances you will have very little chance of financial stability. If you are constantly under pressure to keep up, it is time to withdraw.
Your admission of the financial crisis that you face is a very positive start as it means that you have resolved to make some fundamental changes in your life. By admitting that there is a problem in the first place, you are well on your way to solving it. The art of saving is really a state of mind. Like any skill, it takes some effort and sacrifice to improve. Investing even small amounts of money whilst you are young will grow into a significant sum over time; the sooner you start saving, the better. With determination, commitment and discipline, you can do it.
I look forward to speaking with you on the telephone to see how you are doing.
Good Morning Nimi,