Want to learn how to save money? The majority of Nigerians aren’t so great when it comes to saving money. Most people are looking for ways to save some extra cash and cut back on their spending when they are ready to let go of their bad financial habits.
Little savings can add up, especially if you do it consistently over time, and doing several things all at once may mean that you can save significantly each month. Sometimes all it takes is that first step in the right direction to get things moving in your favor.
Sometimes the hardest thing about saving money is just getting started. These simple tips on how to save money can help you develop a simple and realistic plan to save for goals, big or small.
1. Create a budget.
At the heart of any savings plan is a carefully outlined budget. Budgeting helps you prioritize your expenditure and find a balance between spending and saving money across a whole year.
By checking your credit card statements, bills, banks statements, and receipts, you can work out all your regular expenses, such as your rent or home loan, transport, insurance, and electricity.
Also Read: 8 simple ways to reduce your business expenses.
2. Make plans to save.
Now that you’ve made a budget, create a savings category within it. Try to save at least 10 to 15 percent of your income. Consider the money you put into savings a regular expense, similar to groceries, to reinforce
If your expenses are so high that you can’t save that much, it might be time to cut back. To do so, identify nonessentials that you can spend less on, such as entertainment and dining out, and find ways to save on your fixed monthly expenses.
3. Record your expenses.
A great step to save money is to figure out how much you spend and keep track of all your expenses both business and personal.
Keeping a good record of your expenses over time will help you review your spending habits and cut off on unnecessary spendings that may be eating up on your finances.
4. Make savings automatic.
Another simple way to save money is by automating your savings. Tech startups like Piggybank and Corywise are taking the lead on helping Nigerians (especially the millennials) save money easier and smarter.
The concept of automatic savings using any of these apps is simple; the app automatically removes a set amount from your account as scheduled and put in a saving account that you cannot be withdrawn until a set time has elapsed.
Also Read: 5 Tips for Maintaining Positive Cash Flow.
5. Open a fixed deposit account.
By restricting easy access to your money, fixed deposit bank accounts can give you a higher interest rate than basic savings or transactional account you might be used to.
Fixed deposit accounts allow bank customers to keep their money in the bank and earn several percents per year on top of the original amount. Even if the process of placing a fixed deposit varies slightly from one bank to another, opening a fixed deposit account is still very simple.
6. Choose something to save for.
One of the best ways to save money is to set a goal that you will love to accomplish with your savings. Start by thinking of what you might want to save for, perhaps you want to save for a new car, a new house, a vacation with family or even for retirement.
Then figure out how much money you’ll need and how long it might take you to save the needed amount and make a commitment to make gradual efforts to achieve them.
7. Be a great negotiator.
No other skill in the world will save you as much money, or be as valuable to you later in life, as the power of negotiation.
Learning the art of negotiation can save you thousands of naira each month in the long run. You can make use of books on negotiations and deal makings as a way to start your education on negotiation.
8. Buy things in bulk.
This one’s pretty easy, if you have any items that you use frequently, then look into seeing if you can purchase them in bulk and get a discount from a local supplier.
Oftentimes you’ll find that you’ll get a much better per-unit price, and you’ll rarely have to worry about running out of that item again, making this a fairly easy way to potentially save money on your essential needs every month.
9. Master the 30-Day rule.
Avoiding instant gratification is one of the most important rules of personal finance, and waiting 30 days to decide on a purchase is an excellent way to implement that rule.
Quite often, after a month has passed, you’ll find that the urge to buy has passed as well, and you’ll have saved yourself some money simply by waiting. If you’re on the fence about a purchase anyway, waiting a while can give you a better perspective on whether it’s truly worth the money.
If you ever find yourself spending more than you earn, ask yourself what you could cut out or cut back to save some money.
Obviously, not all of these tips will apply to everyone. Just go through the list and find the ones that do apply to you and use them in your life.