Living Within Your Means

"There is no dignity quite so impressive, and no independence quite so important, as living within your means." — Calvin Coolidge

The average salary-earning Nigerian already has plans for the next month’s salary even before getting paid, and by mid-month, they are back to broke, waiting for month’s end. Well, it’s best and more rewarding of course to have a little money on the side each month to spend only AFTER you have saved.

However, there are many reasons why we spend before we think and not the other way around; this could be because of limited financial knowledge, prolonged bad spending habits, ones orientation towards money, unhealthy competition and much more. Unfortunately, many people are carried away by their surroundings with the likes of VGC, Lekki County Homes and Chevron Drive that spew the latest of the latest cars, attires, landscapes and all. Plus the ease of getting ATM cards (Automated Teller Machine), purchasing items online from any part of the world and paying in various currencies with MasterCards, reckless spending is taking a deep plunge in our pockets.

Well, if you are like many Nigerians who keep spending more than they are saving, you would fall deeper and deeper into debt. Many people use debt as a method for making large purchases that they could not afford under normal circumstances. It’s time to get a hold of our finances. For many people it’s a lot easier said than done, but here are some tips that put spending in perspective: 
Question your wants and needs and distinguish them- do you really need that or this? Do you need this now? Can it be substituted? Why do you need it? And the most important of all Can I afford this?
 
At least can I afford this now? 
Build a budget and stick to it!- many people do not have any idea what to do with next month’s salary, but this is especially difficult for business men and women who may not be able to categorically say how much they earn, while for others theirs is a mental note of their expenses. The trouble with this is that there is a tendency to go with the tide. Your budget should be categorized into fixed and discretionary (luxury), there should also be an allotment for emergencies, but if the month elapses and it is unused it should go into savings.

P.S if you have already tried budgeting and it did not work, try it again, and make it more realistic than it was the last time. Write it down and make it as detailed as possible, it could be monthly or at convenient intervals even weekly, but most importantly: Stick to it!

Pay off your debts- if you are already caught in the web, not to worry (well,worry but a little). First, stop mounting your debts. Don’t just “browse” that website to see the latest offers, you will surely be tempted! Assess the damage, and seek the easiest way to address it, you may need the help of a financial adviser. Try as much as possible not to take loans to offset loans.

Save deliberately- the emphasis is to spend the remains after saving and not the other way round. It may not be so much, but it must be reasonable. Make it a constant and continuous decision. You could open a bank account (that doesn’t have an ATM card or easily accessible in any way) for that sole purpose, or be in a cooperative society or simple Ajo; deposit a certain percentage of your earning.

Boost your income- If your expenses are at the bare minimum and you’re still spending more money than you make, then you make need to boost your income. You should also make sure you’re signed up for the right health, disability, and other company (even government) provided benefits.These may be difficult to find in our dear country, but they may be once-in-a-while or at minimized costs.

Do it yourself (DIY)- there are some skills that can save costs, you could wash your car yourself. DIY has become an acronym for the brave at heart who take on and complete projects themselves. If you have the skill set, willingness to learn and most importantly patience, you can complete almost any project by yourself and save money doing it. By completing projects by yourself, you will save money.

Habits- don’t try to “keep up with the Kardashians” which breeds unhealthy competition. The grass is greener syndrome. Save for purchases instead of taking them on credit

Finally, you may need to get a higher paying job or even a second job to help make ends meet. The key is to do what you need to do to make enough money to pay all your necessary expenses. Truth is if you're locked into an expensive lifestyle, you won't just suffer financial stress. You may also find it tough to lead the life you want. But if your costs are low, you'll find it easier to save money, you'll be in better shape if you get laid off, you'll need a smaller nest egg to retire in comfort. 

Written by: Joy Towuru.