How I Saved Money In An Impossible Year

A New Beginning 

Looking back, coming into 2021 was like, "Thank God we made it"! 🙌🙌COVID- 19 turned the world upside down. We just wanted to be alive. Resolutions? I want to live!

2020.😕 Hmmmm. Why was it so significant? At first, it felt like a new beginning. Or a key turning point. Until COVID...

A lot of us felt stripped in 2020...

•     Worked from home
•     We lost loved ones
•     Ports shut down
•     Factories shut down
•     Businesses shut down
•     Jobs lost, incomes lost
•     Whole countries went on lockdown - some twice, even thrice
•     Riots broke out as people ran out of money and out of food
•    Warehouses, shops, homes were looted
•    People struggled 
•    Governments struggled

New expressions entered our lexicon - mask up, social distance, new normal. No more handshakes, no more hugs, no more sitting close together. No more visits. Public gatherings prohibited. Not wearing a mask in public became criminalized.

The harsh reality dawned on us. As incomes contracted or were cut off through lay offs and the uncertainties persisted, we wished we saved. Or saved more. 

So now that the pressure is off, there must be a fresh start. Life continues and we must make the best of it. Now more than ever.  We must take deliberate actions in certain aspects of our lives to achieve a turnaround. Who knows what is going to hit next?

Personal Finance

So let's look at personal finance, shall we?

Financial experts advise we apply the 50-30-20 budget rule as the simple formula to manage our personal finances.

Going by this rule, individuals should proportion their incomes as follows:

Needs:   50%

Wants:   30% 

Savings: 20%

Needs - 50%

Needs are what you can’t live without, or at least very easily. They include expenses like rent, groceries, utilities - electricity, water, gas.

Wants - 30%

Wants are the things we desire but don’t really need to survive. They might include hobbies, vacations, dining out digital and streaming services such as Netflix, etc.

Savings - 20%

This category covers two main areas:

1. All savings such as retirement contributions, saving for a house. Where you are already participating in an employee / employer contributory scheme, in some climes such as mine, the employee can make additional voluntary pension contribution.

• 2. Debt Repayments - all loans.

My Story

Now we all know even without this guidance, it's only reasonable to save - deliberately put some money aside on a consistent periodic basis for the future. Save for the rainy day, as the saying goes. If we do this consistently, we won't always tell stories that touch each time a need arises.

Although I know all that, long term saving has been a struggle for me. Not for want of trying, though.

Don't get me wrong. Like the next person, I love to have a loaded account and watch it grow. There's a way it makes you feel. And the feeling is very good. Very gratifying. You feel safe. Almost invincible.

But I struggled all though the years to keep whatever I managed to put aside for any appreciable period of time. This went on for many years.

Save. Spend. Save. Spend. Save. Spend.

I couldn't get out of the cycle.

As a young woman, I managed my small earnings. Then I got married. We were in love and happy but the family income was not too great. ✋Anyone out there???

The children started coming and the financial strain bit hard. We lived from paycheck to paycheck. Saving money was just a fleeting thought. What was available was never enough.

The years went by. We wanted the best for our children and because the public school system was not well managed, we put the children through private schools - primary, secondary, university.  The bills hit the ceiling. I turned to my cooperative society - a group of employees who pooled together for financial benefits and activities under the guidance of the State Government. There I was able to save some money and borrowed when necessary to support the payment of school bills. We were investing in the children's future. Sometimes I would manage to hold back some money but it will eventually go to expenses largely because the money was within reach.

Through all of this we even managed to buy a house. 👍Great! However, though my finances were a bit relaxed, I was unable to save much because the designated account was accessible. So I dipped into it whenever there was a need.

In February 2019, I was introduced to a savings app, PiggyVest and I here's what I did:

1. I set up my daily savings and it was a pleasure to watch it grow.
2. I set up a savings target for one year. Monthly deductions from my pay went there.
3. I subscribed to investment opportunities in agriculture and fish farming on the app as they became available.
4. I set up Safelocks (long term savings) which paid interests upfront. I also reinvested all the interests received.
5. Finally, I converted and held interests on my regular savings in USD.

The best part of this is that the money was out of reach.  The interest-free withdrawal window is quarterly. Outside of those dates, the exercise attracted a fee. Funds placed in Safelocks are not available until the end of the deposit period.

All these actions helped me save a little over $2,610 in 2019 - $650 short of my $3,260 target.

Not much, really. But for me, it was big and a good start.

So apart from completing my Post Graduate Diploma Course in Economics in 2019, the savings became my second achievement.💪

What is your financial goal? How much do you intend to save by the end of the year? Yes, some months are already gone but you can still work on the rest of the year. It’s never too late.

First, you have to be determined. Once you settle that, define your savings goal. You can start small and then ramp it up. Set up a system that deducts your savings upfront from your pay check so you are unable to access it. That could be a standing order to your bank, a cooperative society account, etc.

Manage Your Spend

A few tips to help you curtail your spend:

1. Have a budget. Remember the 50:30:20 Rule I mentioned and be sure to apply it.
2. Cut your personal expenses down to only essentials: no new shoes, bags, clothes unless they are absolutely necessary. You don't have to live like the Joneses.
3. If it's not broken, keep using it. And if it's broken, fix it if possible. Don't replace unless it’s absolutely necessary. 
4. If you have a car, fill up your tank weekly. You spend more buying fuel in small quantities. 
5. Buy bus tickets that minimize your travel costs on the long run. You may consider moving to areas where train services have been launched.
6. Cook your meals at home. It's cheaper and healthier than eating out.
7. Don't loan money you can't afford to give away. You may never get a refund.
8. Get out of schemes that take money from you.  You become a prisoner of hope. You'll earn badges and praises and your upline will be enriched. You will be the loser. I've been there. Trust me.
9. Verify information before committing yourself financially. When in doubt, say "No".
10. Have a "no-spend" day. Heaven will not fall.
11. Keep your debit/credit cards at home to save you from the temptation of spending.
12. Manage your online transactions! Every transaction attracts VAT, transaction fee, channel cost on USSD transactions from the GSM provider. Those are in addition to the monthly fixed Stamp Duty, SMS and card maintenance charges in Nigeria. What are the charges in your country? Let me know in your comments. There may be other hidden charges to boost the government's revenue drive.
13. In Nigeria, Point of Sales machines are readily available for mobile money services. Minimize or cut out your use of these services. They definitely cost more than ATM transactions.
14. Get FREE offers when they are available. If you don't, someone else will.
15. Track your expenses by documenting them.

So there. You have it. If I can do it, you surely can do a lot better.

I've upped my game and my savings have hit 7 digits (in NGN, of course 😄). 

What are you going to do? Challenge yourself. If you wish, you may check out PiggyVest here to start your own savings journey. I'm interested in your journey and ideas. Please share in the comments.

Take care.

#finance

#saving

#budget

#covid

#Tinubu

#facemask