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Another Titanic Shipwreck? (Principles of savings in trying times)- 1

When the luxury steamship RMS Titanic met its catastrophic end in the North Atlantic, plunging two miles to the ocean floor after sweeping an iceberg, more than 1,500 people lost their lives in the disaster. One of the safety lapses that contributed to the loss of lives was the number of lifeboats carried on Titanic. They were unthinkably ill-prepared for the worse.
Talking of lifeboats, “recession” seems to be the word feeling so fly and gaining lots of attention today and it appears viewership of financial news on almost every media has skyrocketed due to growing fears on the state of the economy. But is it enough to keep up with financial news or be intentionally prepared for an iceberg?
Let’s look inward. With the current economic crunch hammering on a lot of individuals and the current hike in food prices, pay cuts, loss of Jobs, as well as the current inflation rise to 16.5%, the big question is: What becomes the hope of the common man, coupled with a lot of people losing their jobs on a regular basis, and the cost of living expenses increasing at an alarming rate; exactly between 18—20% as at this day?

Now that’s scary, right? (ha ha, grab some chill pill)
It’s in a time like this that the popular song, which way Nigeria begins to hang on the lips of most Nigerians. That’s why there’s no better time to learn how to handle your personal finance than now, cos money is failing and the value of currency is depreciating rapidly and it looks like you’ve got just one lifeline - arm yourself.
In this first series, we are going to be looking at a few principles on savings which is synonymous to carrying a lifeboat just in case the coast goes gaga.
Principle 1: like it or not, it’s time to live a frugal lifestyle.
But wait a minute … a frugal lifestyle isn’t what you’re thinking. It isn’t about living as cheaply as you can. Rather, it’s about 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.

Living frugally isn’t as difficult as it sounds, and contrary to popular opinion, a frugal lifestyle isn’t about pinching pennies and depriving yourself of things that bring you joy. Rather, it’s about making conscious spending choices that reduce expenses with minimal impact on your lifestyle.
Now, does the word “savings” sound romantic in anyway? Well, savings is that portion of your current income not spent on consumption but invested. This means that, savings become effective when it is multiplied. In other words, any money set aside that isn’t multiplying isn’t savings.

Bingo! Here are three (3) reasons why people save money:
• Emergency Funds
• Major Purchase/Expenses
• Wealth Building
Sadly, only 5% of humans living on earth are actually saving for wealth creation; a lot think they are saving or better put, they are actually saving but are unknowingly saving to be broke - denying themselves of today’s luxury yet not creating means of being financially free.
Learn how to save at least 20% of what you earn. The act of saving is non-negotiable in the journey to financial independence.
As they say, do not spend before you save, the reverse should be the case. Make sure you always set aside a part of your income as savings on payday. The habit of spending first and then saving the leftovers is a bad idea since you always end up blowing a lot of money. Create a separate account where you can keep your savings; make sure you do not have easy access to this account. For instance, do not opt for a debit card for this account. You can use these savings to do the things you enjoy, like educational expenses, buy jewelry, etc. so that you do not depend on your salary for these expenses.

Developing a savings culture creates the foundation for wealth creation. Whatever amount you can afford to save, you should. Once you have a six-eight month emergency fund saved, you can start saving for other things, like a down payment for a house or a new car, or better still — an investment account that can make you really freaking wealthy
Keep your fingers crossed for tips and critical steps you have to take to make the most of your finance. Till you read from me again, stay frugal. xoxo

Cornel Agwu
Financial Fitness Expert

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