Let's Talk Money...

Wasn’t it ‘just’ yesterday that you wished friends and loved ones (and well, enemies also) a Happy New Year? A quarter in 2013 has ended!

What’s happened to our plans and goals for 2013? It’s the first week into the second quarter of the year, and except you have goals scheduled to start in specific months later in the year, you should be one-quarter ways into achieving your goals for the year.

Let’s talk finances briefly.

Did you plan to save towards tuition for your Masters program? Or towards becoming a landlord? How are you doing in this regard? Let’s do a quick performance review.

Say your target for the year is N960, 000. Assuming you are not expecting any lump credits from any other source, you should save N80, 000 every month to make up your target. By now, you should have N240, 000 in that savings account. If you have that amount, or even more, well done and keep it up!

If you do not have up to that amount though, you need to do a financial forensics to see where you are missing the mark. Were you too optimistic when you were planning? If you earn N120, 000 and are planning to save N80, 000, would that be possible? Are you the first child giving money to younger ones or extended family, have a car that needs to be maintained, had not made adjustment for contingencies e.t.c. These are things to factor in. You may have been VERY optimistic when making your plans, but your budget needs to be realistic. Not lazy, realistic.

It is important to work on this oversight so your plan becomes realizable. What should you do?

• Expect the unexpected. Your car may break down; the TV may suddenly ‘come down with a cold’; someone in your family may fall ill. These bills need to be taken care of immediately. Your budget a should leave room for all these.
• Aha! Those little bites. A quick lunch here, a quick lunch there. Suya here, suya there. Do a quick math, and find out how much this ‘little’ indulgence comes to
• Impulse purchases! No more window-shopping – you just may walk out of the store with an item you didn't plan for; no more online browsing… (sad, I agree)
• It may also help to have a separate bank account for savings.

As Pay Day Draws Near...

"Don't save what's left after spending, spend what's left after saving". This was the advice a friend of mine's sister gave to her when she got her first job. I paused and did a quick examination of myself. Do i do the opposite of that? Do you?

A lot of people can't wait for the end of the month when the alerts start rolling in. Some lucky ones have gotten it already. But really how do you plan your expenses. Some people have spent their salaries even before they get it and the next thing you know, you have nothing left. It can be tempting to keep buying and buying and if you are a shopaholic like me then you know that can be a real problem.

Are you thinking of just the 'now' or you have made plans for your future.  A lot of people have this 'tomorrow would take care of itself' attitude, what if tomorrow wants you to take care of it today? Everyone needs to save, no matter how little it is.

A financial mantra is 'save then spend the balance', don't spend then save the balance. It would come as a shock to you when you wake up one morning and have nothing left to save. It's advisable for everyone to allocate a certain amount of money from the on set to 'savings', no matter how little. This way you would know what you have left and can plan your expenses around it.

The first thing that comes to people's minds when they hear 'saving's is to put the money in the bank. With ATM machines springing up everywhere, the temptation to just withdraw a little today then tomorrow then the next can arise. To avoid this, you can invest in shares, insurance or whatever medium you can use. The good thing about this is that they tend to yield more interest than just dumping your money in banks. Cases where bank interests are like 4%, shares can yield like 23%.

Don't come up with excuses for why you can't save. Like i said, it doesn't matter how little. After a while, you will have something set aside for future obligations...Let's act smart, lets start saving.

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