Another Titanic Shipwreck? (Principles of savings in trying times)- 2

As we were saying, many lauded the state-of-the-art, Olympic-class Titanic ship and deemed it “practically unsinkable.” Was there an air of overconfidence? Outright yes!
See, make no mistake about this. Don’t be caught unaware.
The issue of living a frugal lifestyle in times like this cannot be over emphasized. If you recall, in the last series, we clearly established that living frugally isn’t about living as cheaply as you can but making mindful choices that allow you save money wisely so you can live a debt free life and enjoy the small – and big – things of life.

Except you’ve not noticed, the macro economies of Nigeria is shifting and tumbling down on the micro level and you can’t continue to sing qua sera sera and allow the storms meet you where you are, unprepared.

In this series, I want to share with you critical steps you can take right away to make the most of your finances in times like this especially Personal finance:

So are you ready for this?


  • Adjust Your Lifestyle (Oops! That hurts, I guess)
Downsizing and learning how to live frugally can be a great growth strategy, cos if you can learn to make do with less, you’ll increase your savings and you won’t find yourself struggling to adapt to a new lifestyle. Spend within your means. Cut your coat according to your material not your size. The worst thing to do at this period is to get into debt cos of unchecked lifestyle.
  • Live within your means!!! 
Learning how to live frugally can be one of the greatest strategies to master in this trying time, the reason is that, if you can learn to live below what you earn, you will automatically increase your savings and won’t struggle when you’re faced with the iceberg called scarcity.
“It is not more money that curbs excessive desire, it is discipline” –Cornel Agwu
  • Reduce buying brand names and switch to buying functional items. (no hard feelings)
  • Strategically reduce your phone and entertainment expenses.
  •  Shop according to your income; don’t impress anyone and end up broke in the process.
  • Are you spending above 20% on your household item monthly?
  • Reduce the frequency of dinning out. Looks like it’s a good time to explore some culinary skills at home.
  • Have a critical evaluation of your rent. Is it according to your budget? Are you spending above 35% of your annual income on rent? Then you better watch it!
Points to Note:
  • You need to master the difference between wants and needs.
We humans have a knack for complicating the simplest of ideas. Our lives are filled with shortcuts that aren’t short, tips and tricks that trip us up, and helpful hints that are anything but. The same is true when it comes to frugality. Let’s scrap all the circular talk and bottom-line it.

Face it: Being able to distinguish between what we want and what we need is a prerequisite for making wise buying decisions. If you can’t master this skill, your needs will be endless and your monthly income will never keep up.
  •  Understand your Money velocity
As much as possible, become ridiculously acquainted with how much you earn, how much you spend, and where every kobo goes. It’s the foundation of frugal living. Without this baseline knowledge, successful budgeting and saving will always be out of reach.
  •  Live within and below Your Means
Disciplined living (living within your means) is a great start, but living below your means is where the real magic happens. The surplus often generated is the capital for saving and investment and the fuel behind long-term wealth building; it is the game changer. If you can’t consistently run on surplus — either by cutting expenses or growing your income — you’ll never get ahead of the financial game.
  • Know the Difference between Spending and Investing.
Spending and investing might feel like the same thing, but they’re completely different financial beasts (animals).

Investing is the outlay of cash in exchange for a tangible asset (think job training, a primary residence, or shares in a mutual fund). Spending, on the other hand, is the outlay of cash for something that will likely depreciate in value and not provide any long-term benefit (think dinners out or a new summer wardrobe).

Being frugal doesn’t mean you always have to choose investing over spending (after all, spending is part of living), but it does require that you understand the difference and know how to put your income to work very often.
  • Buy Quality Items over Affordability.
Frugality isn’t about always buying the cheapest product; nah, it’s about diligently seeking out the best value and most times, it means carefully choosing quality over price. Avoid being penny wise, pound foolish.

  • Avoid Consumer Debt as Much as possible 
Frugal folks know it: Interest on consumer debt is a tax people pay for living above their means. Interest and other charges will bleed your budget and choke your chances at real financial security. If you cannot afford to pay it with your current income, it means you don’t need it for now. Paying today at the expense of financial future is the worst financial decision one can make. What you can’t pay for, you don’t deserve. No negotiations!

Here’s the curious thing: Today, when we talk about the rules of frugal living, aren’t we really talking about basic financial literacy? It seems over the past couple of generations, common fiscal sense has been reframed as an extreme lifestyle. Maybe it’s time to change the conversation about saving and managing money — and make frugal living a far more fundamental skill.

Too much to bite at a time? Dope! We’ll call it a day today and till you read from me next time, stay frugal.

Cornel Agwu
Financial Fitness Expert

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1 comment:

  1. These are great principles and you are right that one must spend below his means. Our Economy is ringing this into our brain now. Thanks for sharing.