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

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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

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