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Episode 3: How to save when the bills just won’t stop



How to save when the bills just won’t stop
Biko! What is a bill abeg? I’m curious. I’ve overheard a lot of conversations in the last year where someone, usually someone with no real responsibility complains about how their bills keep piling up, so they can’t save. When you ask them what said bills are, they reel off a list of things that sound like consumption choices. A bill, in my opinion, has always meant something that is a necessity and has serious consequences if it is not paid. So in my mind this means rent, electricity, transportation and the like but the reality is, as we get older and our incomes increase, our consumption tends to rise to meet income but our consumption choices don’t always reflect the goals we have for our lives because the income we earn is being dragged in different directions.

Here are three tips that can help you allocate your limited resources

Set spending priorities
‘I would like to go on holiday this year’, If only I was debt free’, ‘If I had savings I would be able to fix my car’…. and the list goes on and on! Most people have a vague idea of what they want for their lives but they either complain about what they can’t do or make wishes, they don’t set goals. The difference between a wish and a goal is that a goal is realistic and has a time frame and a plan to achieve it. So break them down into short term and long -term goals.

Set Short -term Money goals.

      1.Write down 10 short-term Money goals you would like to achieve in the next 90 days to one year.

  1. Identify the three most important short term money goals on that list and focus on them first. They probably all seem important but which top three would make the biggest impact in your life within the next 90 days -1 year.
  1. Write down 10 action steps for each goal, 10 things you need to do to help you achieve each goal?

Here are some examples of Short- term Money Goals
Goal 1: Amaka wants to buy an apple laptop. She has estimated that it will cost N500, 000 by the time she can afford it given inflation. She sets a goal to save N50, 000 every month for the next 10 months.
Goal 2: She also wants to be more prepared in case of emergencies, so she has set a goal to build an emergency fund that is made up of 6- 9 months of her living expenses so she will put N100, 000 a month aside.

Examples of Action steps Amaka can take to achieve her goals.

  1. Cut her spending by 15% to fund her goals.
  2. Set aside 10% of the profits from her business
  3. Open a Zenith Aspire account to earn interest on savings.

Set Long-term Money goals.
Three goals you would like to achieve in the next five to ten years. Ideally, these three money goals should be centred around building assets that can provide you with an income in the future. (stock portfolio, land, property, bonds, treasury bills).
Lets face it Assets are not cheap. However, if you keep putting off building assets, waiting till you ‘hit’. You will end up wasting a lot of time and probably never get round to doing it. You have to learn to plan using your present income to make your tomorrow better than your today. Set aside a proportion of your income every month towards your goals, start small and set benchmarks you will get there eventually.
For example, Tony earns N100,000 and wants to build a house in Ogun state in 5 years. He estimates that the land will cost him N1,000,000. So he sets aside N20,000 every month towards his goal. He knows N20,000 isn’t enough to buy anything significant yet but he systematically saves and sets benchmarks for himself. i.e. when I get to 200,000 I’ll buy treasury bills when I save another N100,000 I’ll start building a stock portfolio etc.
How to smash your Long-term Money goals

  1. Write down 3 long- term money goals
  2. Decide what percentage of your income you can set aside to fund those goals?
  3. Write down 10 action steps for each goal, 10 things you need to do to help you achieve each goal?

Here are some examples of Long- term Money goals
Goal 1: Tony wants to improve his net worth by 25% in 5 years.
Goal 2: Ashake wants to become a landlord in Aja by the time she’s 30
Goal 3: Tokunbo wants to leave paid employment and start a beauty business in 5 years.

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  • Khadri Ryan

    Thanks once again Arese, please i have a question .
    How can i buy stock portfolio ? At least i know about treasury bills and bond but dunno about stock portfolio

    • Sincerity

      Stock Portfolio means,various stocks of different companies.
      For example,you may purchase the stocks of companies A,B,D of varying quantities and amount.
      Do I make sense?

      • Khadri Ryan


      • Khadri Ryan

        But getting one is not easy

        • Sincerity

          May not be as difficult as you think. Get a reliable Stock Broker since waiting on companies to sell may be a long waiting. But make sure that you are on the guard as some may want to play on people’s naivity.

          • Khadri Ryan

            Yeah you are right, getting the right Stock broker is the koko

          • Sincerity

            Getting the ‘authentic’ of everything now is an issue! Hmnnnn,but not impossible.

            Just make sure that control does not replace trust.

            Good luck.

  • Sincerity

    Very incisive.

    The other thing that I want to add is that;don’t follow the crowd.

    You don’t have same income and background.

    Always do things that if not done,may expose you to ridicule!

  • Yvonne Dozie

    Very educative, Arese, I have learnt a lot from you. Concerning Zenith Aspire, I found out it’s for students/undergraduate. Is there any other products for those of us who earn little but are graduates?

  • Vivian A

    Everyone needs to read your book! You are a fountain of knowledge especially for this season that we are in.

    I want to add this – A lot of young women succumb to family pressure and spend their savings to meet the family’s wants. People may come at you with “Won’t you marry someone that has money? Why are you saving?”

    Don’t do it! Keep your eye on the prize and you will win!

  • Just got my book today and can’t wait to start reading it! Although I think I’m generally good with money matters and savings, there’s always room for improvement!

  • Gbenga

    Interesting, should get a copy because I believe I will learn a few things to help me improve.