While there’s every reason to celebrate Nigeria’s 57th birthday just past, which is by all means your patriotic right, it’s common sense to do so wearing your thinking hat to ensure you’re not going to be emptying your storehouse to do so. Today’s economy demands you be a little wiser with your spending habits and start living within the budget especially if you have just one source of income and your pay grade doesn’t run in the six digits.
Times are tough. You’re either out of a job or yours doesn’t pay enough and you need to save money, pay off your debt, and avoid going broke. Also, higher paying opportunities don’t come so often or so easy, so it only makes sense to find ways to make what you have go a long way to meeting your “needs” and still have some left for your “wants”.
Here are some simple actions that can help you plan your finances better, so you can live comfortably even though you’re on a budget.
1. Create a Realistic, Working Budget
Simplicity is easier to embrace when you have a working plan and a practical budget. It’s easier to say you won’t exceed a spend limit than to actually work towards it. Start by setting a financial goal for example; avoiding debt and saving for the future. Track your income and expenditure, this will let you see how much money you’re working with and what changes you need to make. The best way is to create a list, setting aside what to “save” or “invest”, itemize your “wants” and “needs”, [putting into consideration the things you should cut back on] and stick to the plan.
2. Save or Invest
It is said and it’s true that before you spend, you must set aside either as a saving or an investment. As you prepare your budget, surely from your cut backs, you will have a few coins floating about, include this as a part of your savings. Here’s the thing, DON’T spend them however you please; when the Friday mood hits, or the need to buy that new outfit, those magic coins should be far from your reach, in your savings account, so you’re not tempted to spend it. This way you’re automatically forced to continue living on the amount you budgeted and have more in your pocket.
3. Cut out Unnecessary Expenses
A good way to live well by sticking to your budget, is to be aware that there is a difference between “needs” and “wants”; you should have a clear idea of when you ABSOLUTELY need something and when you just THINK you want it. Make a list of all the things you spend on regularly and ask yourself if you really need them; consider those that can be reduced, substituted with the cheaper option or eliminated from your lifestyle. Ask yourself – “what are the basics i really need to stay alive?”- food, clothing, shelter, and school fees if you have children, and you will see that everything else is by discretion when you think about it.
4. Change your Lifestyle
Do you always eat out? Do you frequent the cinemas? Are you a “turn-up” addict? Are you a shopaholic? Do you buy everything on a whim? If so, you are spending thousands yearly on unnecessary things. Lifestyle is the first expense you’ll need to tackle when it comes to living well on a budget. We like to do things in our free time and for fun, but when money is tight, we need to be a bit more calculative on how we entertain ourselves. Just think of how much money you would save if you cut your spending on luxury activities/items and looked for cheaper alternatives.
5. Review Expenditures from Time to Time
If you intend to live well on a budget, you must be aware of exactly how much money you’re making, saving and spending every month. Periodically add up and compare all of your bank statements, bills, receipts, paychecks, and anything else you need to fully review these expenses. Tracking every single expenditure may seem like an unpleasant chore, but you will find out that it’s a useful and eye-opening habit. It’s paramount that you know whether you’re making as much as you’re spending, as this should help you live within your means, which ultimately will make your life much easier.
6. Prioritize but Leave Room for Emergencies
Unfortunately, money doesn’t grow on trees and the frequency or amount that you earn could be limited, so it’s important to make every penny count. Erm, do you want a wardrobe full of clothes or a month’s supply of groceries? Some people might not view these as essentials, but you do and that’s all that matters. So whatever is more important to you, make room for it in a realistic way. Also remember emergencies can strike at any time, you could have a medical issue or your car might break down, you don’t want to be running from pillar to post, getting into debt because of this, always have some money saved up for a rainy day’
7. Get insurance coverage
Here’s a little secret you’ve probably never heard anywhere, insurance can help you live well on a budget. Remember that insurance is designed to help you out with eventualities right? Well, by putting down a token sum for your insurance coverage within your budget, you’ll be ensuring you don’t spend outside your budget when an eventuality does happen. A little but frugal spend on an insurance cover for things you value; Car, Health, House e.t.c, will go a long way to prevent a big spend that could leave you broke later.
8. Get Educated in Finance
One very important thing to not neglect is your financial literacy with budgeting. How financially savvy are you? You might need to upgrade or update yourself on the best ways to manage finances on a budget. Fortunately there are mobile / non-mobile applications that can help you manage your finances, plan budgets and also educate you on how to keep your spend within the budget.
Nobody ever said it would be easy to enjoy life on a budget. Still, if you go about it the right way with these money-saving strategies, you can cut expenses and live a quality life at the same time. If you watch every penny you spend and carefully squeeze value from every expenditure, you’ll be able to enjoy life again without looking over your shoulder for debt collectors.
This article is provided by compareinsurance.com.ng, the online insurance portal for buying insurance from Nigeria’s most serious insurers in 3 simple steps…
Kindly visit our website on www.compareinsurance.com.ng or call Sola on 09090004273 to get more information and help today.