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Ogechi: Want To Increase Your Income? Do This One Thing…

Ogechi OneSavvyDollar

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Saving is one of the foundations of wealth building. Sadly, it is the foundation of people’s money problems. Some of us have that one friend that if we allowed, would be on our payroll. Because the moment you get paid, they’re at your door with their problems… to borrow. They cannot go to the bank for many reasons; collateral, high interest, or the process might be too long /complicated. So, they go to friends; friends don’t charge interest. Or maybe you’re that friend who does the borrowing.

The number one reason people borrow is to pay for emergencies. Then again, the word emergency is ‘relative’. Many have borrowed to: buy weaves, floss on vacations so they could take pictures for “The Gram”. You know, these days, it’s all for The Gram, even to pay for flamboyant weddings. The reasons are endless.

The moment you start borrowing, you have to answer to someone because you need to explain why you need the money. You will also gradually lose friends if you keep borrowing and crown it with a reputation for not paying back. If you find yourself borrowing all the time, you need to take a moment to assess your finances and determine why you’re not saving. Also, if you are trying to start a business and you’ve not handled your personal finances, meaning, you are still borrowing just to pay your bills or deal with ‘emergencies’, it is going to be nearly impossible for you to not only start your business, but take care of your cash flow when you have the business up and running.

The two greatest lies people believe about saving is:

1) I can’t save because I don’t earn enough. Most people are convinced they don’t earn much or enough to put something away. That is not true. I have met people who earn a lot of money yet have zero savings and others who earned little but saved religiously. Truth is, the moment you get a job and start getting paid, you are making money. The mindset of waiting till you get that N1,000,000 a month job to begin to save should be erased…completely. It’s not how much but how well.

2) You don’t need to know how to save. It is more important to increase your income. This is a half truth. I once saw a documentary on lottery winners. The documentary was about their lives years after their big win. These were people who won millions. Guess what? Most of them were more broke than they were before the money. Winning money, suddenly becoming rich, or earning more will not solve the problem. It’s like putting only band aid on an injury that needs stitches. Your problems won’t necessarily go away when you start earning more. Chances are, they may increase. The moment you earn more, the more you spend. Suddenly, you want a better car, a nicer apartment, you would want to dine in a fancier restaurant, shop in expensive stores. It is better to learn to save and find ways to increase your income at the same time.

To start saving, you only need to do one thing.

Pay Yourself First. If I ask you if you love yourself, you will most likely say yes. The concept of paying yourself first is loving yourself enough to do right by you and your future and logic behind this is simple. The government has already taken their cut (tax) from your check before it gets to you. So, you reserve the right to pay yourself next. This should happen immediately you get paid. To practice this effectively, you will need to: Create. A. Separation. Habit (CASH) by analyzing your situation i.e. your monthly income and expenses and determining what percentage you can afford to put away each month.

Separation has been used as a method of control for decades and it is still one of the most effective ways of keeping situations in check. Within the arms of government, there is separation of powers. The legislature does not try to interpret the laws neither does the executive attempt to create the laws. In companies, there is separation of powers for internal control against fraud. In your case, your personal finance is your company and you are the CEO (Cash Expert Officer) telling your money what to do and where to go. You allocate a portion of your income to yourself, your bills and then the left over for spending. Not in the reverse. I practice this and it works (like aboniki balm).

I don’ borrow from people; it messes up my own swag. This is not a claim of being all sufficient but I don’t have the energy to answer to someone, entertain harassments or gossips. If I can’t afford it, I don’t bother. So, in analyzing my own situation, I realized my monthly income could pay my rent three times. I pay myself one third, pay my landlord two thirds and the rest goes to everything else. This has helped me during my own emergencies and jumpstart my business without borrowing. One of my favorite phrase is Start Small Today. Nope! Not tomorrow, next week, next year. I like that phrase because no matter how many ways you change it, it comes out the same: Start Today, Today Start, Start Small. Start. You get my drift? Don’t focus on the amount; it may overwhelm you. Your aim for now is being consistent.

The principle of saving will not change regardless of what part of the world you reside. Your ability to put away a percentage of your income will determine your ability to invest. You always need startup cash to do anything. If you don’t save, you cannot invest and you won’t grow much from your current state. It’s that simple.

What exactly is preventing you from saving? Share your favorite tip(s) for saving.

Photo Credit: Dreamstime | Fernandes Borges Michel

Ogechi is the founder of OneSavvyDollar.com OneSavvyDollar exists to make your personal financial life dramatically simpler, more convenient, less intimidating, more fun and fashionable by teaching personal finance in a fun, engaging and empowering way. On her blog, she writes about entrepreneurship, career, education and interesting money news. Connect with her on facebook: @onesavvydollar or Instagram: @onesavvydollar

29 Comments

  1. natty

    June 29, 2015 at 6:31 pm

    I save 70 percent of my salary, no I don’t earn much, I just cut my costs. Every quarter I try to splurge a bit on clothes etc. I still use an S4 cos it’s working well and I see no need to keep up with the Joneses

    1
    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:24 pm

      Nice one! I’m glad your priorities are in order.

    • bbz

      July 2, 2015 at 9:37 pm

      @ natty, good for you. But am guessing you do not have to pay house rent, pay tithe, buy groceries every 2 weeks.
      Am sure if you had too then [email protected] is a bit too much.
      I get to pay for all these n even more because i do not stay with my parents due to having a job in another city. But with that i am still able to save about 25% of my income.

      I will say keep it up especially for those days when other responsibilities could arise.

      1
  2. ese

    June 29, 2015 at 6:59 pm

    i find it so hard to save… thanks for this writeup.. i would put it into practice..

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:25 pm

      You’re welcome. Just Create. A. Separation. Habit and start Small consistently. That’s all you need to remember.

  3. sally

    June 29, 2015 at 7:13 pm

    So thoughtful….. some tips ve used include: having a daily/weekly/monthly budget wit plans 4. Miscellaneous expenses which is usually a specific amount I don’t exceed except. Something realllllllly serious comes up.

  4. xty

    June 29, 2015 at 7:15 pm

    Kudos @ something informative…..i was beginning 2 think dat all ppl care about now is relationship talk……

    1
    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:58 pm

      I’m glad this corner is changing your perspective and BN is providing a variety. Thank you for reading too.

  5. Oloye

    June 29, 2015 at 7:28 pm

    God bless you Ogechi – youth of today lack financial intelligence and I am so afraid our generation will pay for it dearly. Just see the link below and imagine what young Nigerians are doing with money Sunday thru Monday morning:

    https://instagram.com/p/4gxuQZiwWv/?taken-by=deejay_olu

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 10:00 pm

      One thing I can say is, they’re definitely balling!

  6. olu

    June 29, 2015 at 7:41 pm

    Your words are true.
    If only most would listen to you……

  7. @edDREAMZ

    June 29, 2015 at 8:22 pm

    a.k.a EDWIN CHINEDU AZUBUKO said..
    .
    Making sense post but the way gals are demanding this days is so hard to save i swear…..
    .
    .
    ***CURRENTLY IN JUPITER***

    • Pabara

      June 29, 2015 at 8:58 pm

      @edDreamz,lol! Don’t worry you’ll find the one that’ll help you save!!! you sef don’t look for trouble with gals that demand too much,stay on your lane.

  8. aisha

    June 29, 2015 at 9:40 pm

    I save so much that at the end of the month I am broke.. but I look at my stash neatly piling up and its all worth it.

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:56 pm

      Good work! You can take it to the next level- finding a ‘good’ investment.

  9. Fabulous B

    June 29, 2015 at 9:55 pm

    LOL just remembered a relative of my mom that came to her to borrow money for her son’s wedding. She knows that my mom is a working widow and got no one to rely on. She stopped talking to my mom because she didn’t borrow her offcos! And doesn’t speak to her till date. Iya mi, got better things to bother herself with than with one yeye relative that doesn’t add any value to ones life.
    Back to the culture of saving. Thanks for the write up. Spot on!
    Darlings, if you’re single and still live with your parent(s), it’s an opportunity to save. Limit your partying & owambe & aso-ebi & other money adventures. All the best

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 10:04 pm

      Yeah, that’s one opportunity young people miss (no responsibilities because they are living with their parents) till it’s too late. Haha! Your mum’s relative will be alright…

  10. Lakinky1703

    June 29, 2015 at 10:07 pm

    Thanks for this lovely article Oge; one way I save is to drop N50 to 200 denomination everyday inside a taped box I place beside my desk in the office. I try not to get tempted to take it sometimes… believe me, I’m usually very proud of what I see at the end of the month!

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:55 pm

      Haha! I love ‘surprise’ money too 🙂

  11. Mabel

    June 29, 2015 at 11:43 pm

    I put all the money I need in individual envelopes each pay period; money for transportation, treats, entertainment, clothes(not every pay period), lunch, then I use specifically that money and when it is done that’s it. I watch most of my movies online and forego the $13 movie tickets, I eat more veggies and less meat, I do clothes and shoe swaps with my sisters to cut down on clothes shopping. Unless there is a specific reason to go out I stay home on the weekends, once you are out gallivanting you run through money faster than you planned. I have friends who party every single weekend and they are always bawling about their finances, I would have chopped off the cable, but my father is with me for a bit and he is a tv person, so I left it alone, as soon as he is gone I am disconnecting it because I watch most of my stuff online anyway, that alone will save me about $720/yr ain’t nobody got time to be spending almost $1000/yr for cable, that’s a vacation right there.

    There are so many ways to save money, nobody should say they can’t save, once you start seeing how money compounds it will make you even more disciplined with saving.

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:36 pm

      Putting money in individual envelopes is the separation habit right there. For a while (during my masters), I didn’t have cable. Too much of a distraction. Plus I watched all I needed to and caught up on all news online. I do have cable now, but I don’t pay for it. You’re right watching the compounding effect of saving is a great motivator 🙂

  12. Dora the explorer

    June 30, 2015 at 12:09 am

    Hey! thank you Oge. Very timely topic for me> Dora the explorer you need to explore less and save more! you have seen enough for now.. Have you heard me? YES MA’AM!!!

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:31 pm

      If you mean ‘explorer’ as in travel, travel is good. Traveling and saving at the same time, even better. Thank you for reading.

  13. T.Girl

    June 30, 2015 at 12:23 pm

    Well, the old me used to say number one a lot ‘I cant save cus I don’t earn enough’ … well I decided two months ago to break that nonsense so I opened a fresh account , I dint collect my ATM or CHEQUE nd dats where I put some amount every month… now when I think about the money I’ll spend to get to the bank, get a withdrawal slip nd wait in line? I just forget it.

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:40 pm

      Haha @ the process alone discouraging you from withdrawing money. Your method is definitely one effective way of saving.

  14. Ephi

    June 30, 2015 at 1:02 pm

    Great article.
    Saving has always come naturally to me, what I struggled with was achieving a balance – I wanted to save adequately while not feeling like I am basically living just to work and save. We only live once afterall. It took me a while to get to that point where I did not feel I was saving too much at the expense of not doing things I would love to do – but it was worth it i must say. I also think Saving is Step 1, the building block. The next step is Investing (as someone rightly mentioned, compound interest does wonders).

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:53 pm

      I’m a natural at saving as well. I also love to travel. So, I cut back on other variable expenses and get to enjoy the best of both worlds.

  15. adelegirl

    June 30, 2015 at 4:01 pm

    Very important article. The importance of saving cannot be overemphasized really. Learnt this the hard way when I had to take a pay cut. I hardly ever saved when I earned more. It was spend spend spend galore. Thankfully taking a pay cut taught me the importance of saving and I started saving 25% of my monthly income. Now that I earn much more than my previous jobs, the saving culture I imbibed has helped me. As a start, for people trying to imbibe the saving culture, you can set up a direct debit facility on your account so that once your salary comes in every month, a portion you want to save goes into your designated savings account or if you are in Nigeria and your bank does not have direct debit facility, you can try a contributory savings scheme better known locally as ajo or asusu (I think). Volunteer to be the last person to receive the contribution. Because it is a commitment you are less likely to default because there is someone waiting each month to take the contribution so the ajo administrator will be on your case if you attempt to default or even pay late- nobody really wants that 🙂 . This is what helped me jump start my savings culture and I am glad for it. You will be amazed at how many expenses are actually frivolous and you can do without when you take a stark look at your income vs your expenses.

    • Ogechi OneSavvyDollar

      Ogechi

      June 30, 2015 at 9:50 pm

      People have gone into work only to either be notified of a pay cut, or lost their jobs entirely. Saving/building your emergency funds definitely comes in handy then. Thank goodness that phase for you is over.

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