How to Save Effectively

I know I have said this, and I will keep on saying it: I love saving. It’s my passion and my hobby. I wish I was lying but I’m afraid I’m not, it’s something that just gives me joy, maybe I should start my own savings institution, lol.

But I’ll be honest, I never knew how to save effectively. And if I knew then, what I know now I would have saved all my school allowance and undergone regular fasting and prayers with the prayer force team at my university chapel.

I guess y’all were expecting something different, well not in today’s post. Today I am going to talk about how to save effectively, because it is only when you know how to save effectively, you’d be able to invest.

Before we get down to business let me gist you guys about the times I missed some good savings opportunities.

So the first time I was presented with a savings opportunity would be in my 200 level. I think that year Piggysave just started and the Piggysave team came for one of my entrepreneurial class to discuss how the platform provides people with the opportunity to save regularly. They practically told us that with their savings plans we can save on a monthly, weekly, or daily basis using our allowance. The objective was to end the semester with a lot saved in our Piggysave accounts.

To be honest, what first came to my mind was “is this not asusu?” The fact that they would be collecting this fixed amount periodically, plus the fact that I did not receive bank alerts made me quite skeptical, because if they debit me more than expected, wahala go dey. So, I just basically dissuaded myself from registering on the platform.

That same 200 level I think, another savings platform — Investment One, came for another entrepreneurial class at my university. To be honest, I can’t remember if they offered to invest our savings on our behalf or not, but all that I can remember was that they offered similar savings plans as Piggvest.

When I think about these opportunities I missed I get angry, because though I was saving some of my allowance in my second account, I wasn’t consistent and I wasn’t even earning any interest on this money, and they were even crediting me for atm card I was not even using at school. I will not mention the bank’s name because I sent my Resume for a job vacancy.

Anyways after school, I still did not learn my lesson. I remember so many times my friends told me to join Piggvest, which was formerly Piggysave: I was so reluctant because I felt like, in fact, I knew that they were only inviting me so they can get a referral bonus. I later decided to download the app, but not with their referral link, lol, but I never used the app to save or invest because they were asking for bvn — My Nigerian mentality had hindered me from seeing the light.

I’ll let y’all on a little secret, one of the main reasons why I never started investing on time in 2020 was not mainly because of the prospects of low returns, but the fact that I had to upload my bvn on these apps. I was skeptical of these tech companies. What if they were using this information to monitor me or track my bank statement? LOL. But now when I look back at myself I’m just like Esther you did not have sense, they only needed your bvn to create your bank account within their system and identify you. Anyway I have been given financial wisdom.

So now lets put the gist aside and get down to business.

How does one save? That’s very simple by developing a regular savings plan which allows you to save a portion of your income. So if you are earning 150,000 naira monthly, after budgeting for all your expenses you can allocate 30,000 naira to your savings account. The amount you save depends on you to be honest, it mustn’t be 30,000 naira

But it doesn’t end there. Saving in an account that doesn’t yield you interest is not saving effectively because let’s face the truth, the 10,000 naira you save today which can buy an I-watch, cannot buy that same quality of I-watch in the next 5 years. So basically having 10,000 naira sitting in your account not earning any interest is not saving effectively. Let me also remind you that most, if not all of these banks collect charges on a monthly or quarterly basis. So if they collect 53.75 naira quarterly, in 5 years that 10,000 naira would actually be 8,925 naira — assuming you don’t put any money into that account during this 5 year period.

Now, how does one save effectively? I have said it countless times, you save effectively when you save and earn interest on your savings.

You really don’t need to invest to get an annual interest on your savings, several platforms allow you to save and earn interest. I personally use Piggvest, lol I know after running away from them since my 200 level I finally came back. The reason I actually picked Piggvest was because I had already invested money on Cowrywise and Pettysave, and to be honest, I’m someone that hates putting all my eggs in one basket. I also tried to invest in Piggvest’s agricultural projects but they are always sold out. So, I decided to use it as a savings platform instead.

The platform actually offers an 8% interest rate per annum, it was 10% when I started don’t know why they reduced it. They also offer a dollar­­-dominated savings plan at 7% per annum.

Which brings me to point 2b — Saving in dollars, or any other foreign currency.

To be honest, this is something we may not want to accept, but it’s reality, the Naira is depreciating in value, and if you are someone that makes foreign currency transactions a lot, saving in Naira is the same thing as you shooting yourself in the leg. Because from my discussions with colleagues and people working within the relevant sectors of the economy, they don’t see prospects of the Naira regaining its value, within the medium term. Expect the next elections bring about a change in those wielding the relevant power that would effect change within this line. Then again, the effect of any of these new policies may not start to crystalize in the short term.

So why not hedge against the risk of a depreciating currency?

Lol, I’ll stop here for today, before I dive into the Nigerian Economy. Abi should I change my blog to the NigerianEconomist?