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Five Ways To Be Smarter With Your Money

One important thing in life is to be able to make smart money decisions. We keep that the only way to be smart with our money is to stick to a budget and save. That’s a good idea, but it’s not the only way to be smart with your cash. Psychology plays a huge role in making smart choices every day that will last.

If you find yourself feeling like you fall short when it comes to making smarter choices with your money, we have curated five research-backed ideas that you can incorporate into your daily life. The best part is that none of them involves tracking a budget.


1. Make savings automatic and spending difficult

If you have to think about savings, you probably won’t do it. Knowing this, you can make it easy on yourself by automatically transferring money for savings each month and also investing.

Thankfully, there are many ways to automate your savings so you dont even have to think about it. You can set an automatic transfer to save a part of your paycheck or use any of the automated savings apps.

You can also make your savings very difficult to spend by separating the accounts where you save and where you spend in different banks. And when you get tempted to dip your fingers into your savings, let it take a few days to transfer to your spending account.

2. Increase savings automatically

“Save more tomorrow.” – Nobel laureate Richard Thaler

Commit to saving an increased amount of your paycheck in the future. If you are saving 15% now, make sure to increase that amount to 20% next year or increase by 1% every other month. It’s easier to do when saving automatically through your employer but you can do it by yourself when transfering savings automatically.

This tip is even more useful if you are struggling to save 15% of your paycheck. You can start with 5% and take it up from there. Before you know it, your savings account and saving culture will grow and leave you feeling pretty great.

3. Think small

Saving up for a big goal, like a house or paying off debt, can feel daunting. Many people prefer saving N2,000 a day to N60,000 a month. It’s the same amount but doesn’t it feel that much easier?


Let’s say you have a goal of saving up to buy a house. Instead of thinking about the whole amount that you need, break it down into a daily goal to save. If you wanted to save an extra N150,000 this month for that goal, then focus on saving N5,000 each day.

It’s easier to break that huge amount of money into a daily goal. Doing this, you’ll find yourself cutting down more and more on your spending. You’ll skip going out to lunch and take food to work from home or take a bus instead of a taxi.

4. Make it visual

It’s time to break out a vision board! According to research, having a tangible goal and a vision for what you’re saving for makes saving easier and increases your anticipatory happiness.

Having a clear goal in mind will help you stay focused on the type of life or experiences you want to have and not let little day to day impulse buys stand between you and your goal.

If, for instance, you want to go on a summer vacation with your friends, keep images of those dreamy beach huts somewhere you can see them easily. Make a vision board, put a photo of it on your desktop and name a savings account ‘2018 Summer vacation’. Seeing a picture of yourself happy and relaxed on a beach is enough to remind me to steer clear of those impulse buys.

5. Buy happiness

Being smart with your money as we know it isn’t just about saving and investing. You also have to make the best choices with your spending money. You’ve worked hard for it, so make sure you spend it on things that bring you the most happiness, including experiences, other people and things that save your time.

If you want to buy back time, for instance, you might get the most happiness by spending on meal delivery or a laundry or house-cleaning service. If experiences make you happy, spend on relaxing vacations, visits to art galleries and museums, or learn a new skill. If spending on other people gives you the most happiness and fulfilment, donate to a charity you love or buy a gift for a friend.

Whatever will bring you the most happiness, do that and don’t feel badly about it.


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