Money Saving Strategies for Nigerians in 2024.
Saving money is very important in creating any form of financial stability or security for yourself as an adult and yes, we know that saving money with our new reality isn’t exactly easy and can seem like an impossible task, but it is very possible to save realistically in 2024.
This article explores the 50,30, 20 rule and some practical tips and strategies for saving money in Nigeria.
What is the 50,30,20 Rule?
The 50/30/20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do.
The remaining half should be split between savings and debt repayment (20%) and everything else that you might want (30%).
The 50–30–20 rule is intended to help individuals manage their after-tax income, primarily to have funds on hand for emergencies and savings for retirement. Every household should prioritize creating an emergency fund in case of job losses, unexpected medical expenses, or any other unforeseen monetary cost. If an emergency fund is used, a household should focus first on replenishing it.
5 Ways to Save better as a Nigerian this 2024.
1. Never let your rent be more than your three months’ income:
One of the most effective ways to save money is to ensure that your rent always falls within a few months of your income, specifically, not more than three months’ worth. This means that if you make N600,000 per month, your rent should never be more than N1,800,000 per year. Keeping your rent at or below this threshold gives you flexibility and ensures you have enough leftover money each month to cover other expenses and save some for your future. Doing this can help you reach your financial goals easier and live a fulfilling life.
Another benefit of keeping your rent within these guidelines is that it can help you avoid falling into a cycle of debt. When rent is too high, it can be challenging to make ends meet and pay for other necessities, such as food, transportation, and healthcare, leading to financial stress and even debt, which can be difficult to break out of. You can avoid this trap and maintain a stable financial situation by keeping your rent affordable.
2. Buy quality Items & in bulk.
Bulk buying and purchasing quality items are essential tools for cutting down spending costs and lessening the effects of inflation; buying in bulk allows for savings on costs per unit while also providing a defense against inflation’s impact.
“Opting for quality items may require a higher initial investment, but it proves to be a cost-effective decision in the long term. Take, for instance, purchasing a new phone — while it may seem pricier upfront, its durability and longevity often surpass those of used devices, resulting in overall savings over time.
Buying in bulk is a cost-effective strategy that can help businesses and individuals take advantage of economies of scale and save money on their purchases. This strategy involves buying large quantities of a product at once, typically at a discounted price. By purchasing large quantities of a product at once, you can negotiate better prices with suppliers and reduce the overall costs of the items. The cost savings can come from various sources, including bulk discounts, volume discounts, or reduced shipping costs.
Moreover, buying in bulk not only streamlines procurement processes but also helps frequent shopping trips, saving both time and money. However, it’s crucial to acknowledge that bulk buying may not always be feasible, particularly for businesses with constrained storage space or budgetary constraints. Additionally, considering product expiration dates before committing to bulk purchases to avoid wastage.
Automating your savings is a smart strategy to overcome the temptation of impulsive spending, especially when funds are readily accessible via ATM cards, USSD payment channels, or mobile banking apps.
Wealthbuddy provides a seamless solution through its automated savings and investment platform. By simply setting a predetermined amount to be saved automatically on specific dates, you can effortlessly build your savings without the need for constant manual intervention.
To put this strategy into action, consider setting up direct transfers from your bank account to your Wealthbuddy personal savings account, by automating this process, a portion of your income is stashed away every time you receive a paycheck, ensuring consistent savings growth. Plus, with Wealthbuddy’s attractive interest rates, your money works harder for you, amplifying your savings efforts effortlessly.
In today’s economy, where prices continue to increase while incomes remain stagnant for many, focusing solely on a single stream of income is no longer feasible. To adapt and thrive, many are increasingly turning to upskilling and side hustles as viable strategies to supplement their earnings. Whether it’s acquiring new skills to qualify for higher-paying positions or delving into side ventures such as freelancing or online crafts sales, opportunities abound to boost income. Platforms like Upwork and Fiverr serve as gateways to transforming passions into profits, offering avenues for individuals to showcase their talents and expertise. By investing in upskilling efforts and exploring diverse income-generating avenues, individuals not only enhance their financial standing but also position themselves for greater career advancement opportunities. Embracing these initiatives not only enriches skill sets but also provides a cushion against economic uncertainties, empowering individuals to navigate the ever-evolving economic landscape with confidence and resilience.
5. Save & invest in high yield savings account.
Diversifying your savings and investments is a strategic move to enhance your financial resilience and maximize returns. By allocating a portion of your savings to high-yield savings accounts or investment opportunities, such as those offered by Wealthbuddy, you can capitalize on higher returns compared to traditional savings accounts. Additionally, hedging against inflation becomes increasingly important in volatile economic climates. One effective strategy is to save in different currencies and take advantage of investments like the Meristem dollar fund, to safeguard your funds against currency devaluation and inflationary pressures.
Other Essential Money Tips for Nigerians This 2024
1. Prioritize Personal Finance: Arm yourself with more financial tools by reading books and consuming verified media related to money management. Apart from learning, you should also invest your time in developing new skills, maintaining your health, and meeting new people, as these factors collectively contribute to your long-term success, both in terms of your finances and your overall quality of life.
2. Learn how to Budget: The classic first step to managing your finances is learning how to budget. Create a budgeting plan where you allocate reasonable amounts for your wants, needs, and savings, and then stick to it as much as possible. Track all your expenditure to ensure your money goes exactly where you need it to. Remember, budgeting is only successful if you adhere to your plan.
3. Emergency Fund: Even the tightest budget should allocate money to an emergency fund. An emergency fund is your fallback for unexpected life events that cause financial hardships, and it can help you avoid going deeper into debt when emergencies happen.
4. Delay purchases with the 30-day rule: One way to avoid overspending is to give yourself a cooling-off period between the time an item catches your eye and when you actually make the purchase. If you’re shopping online, consider putting the item in your shopping cart and then walking away until you’ve had more time to think it over. (In some cases, you might even get a coupon code when the retailer notices you abandoned the cart.) If 30 days seems like too long to wait, you can try shorter periods like a 24- or 48-hour delay.
5. Cancel unnecessary subscriptions: You might be paying for subscriptions you no longer use or need. Reviewing your bank statement carefully can help you flag any recurring expenses you can eliminate. And avoid signing up for free trials that require payment information, or at least make a note or set a calendar reminder to cancel before the free period ends.
6. Pay Off Your Debt: Debt is the opposite of savings; the longer you put it off, the more expensive it’ll be. So, you should prioritize paying your debt off as early as possible.
7. Set short and long-term goals: Setting short and long-term goals is a great way to boost your financial success. That way, you can always keep your eyes on the prize. Start a practice of writing down your goals, this will help keep them top of mind for you when you’re making daily spending decisions.
8. Minimize restaurant spending: One of the easiest expenses to cut when you want to save more is restaurant meals, since eating out tends to be pricier than cooking at home. If you do still want to eat at restaurants, try to reduce the frequency.
9. Black tax & Giving: Having a budget for your black tax or how much you give is a great way to ensure that you give back to your community and support causes you believe in without overspending. This budget should be a set amount of money you allocate specifically for charitable donations and volunteer work. When creating your giving budget, it is important to be realistic about how much you can afford to set aside each month. It can be tempting to give more than you can afford but remember that you also need to take care of yourself and your financial needs.
Conclusion: Saving money in Nigeria can be challenging but with the right strategies, it is possible. Remember, the best way to save money in Nigeria is to start small, be consistent and disciplined, with time you will achieve your financial goals and secure your financial future.
Always remember that we are proud of your smart financial decisions and will always remain your financial partner through this journey.
With Love,
Your Personal Wealth Advisor 💚
