Hi, I am Monsur Lovelace. Remember me? If you do not please check out the “Monsur Lovelace Fiction and articles” on the blog e.g The Maze, Plain White, Loving The Right Way and so on.
Today, I would be writing a piece on Money. I hope you receive some insight from this post.
It certainly isn’t news what the current exchange rates are doing to the Nigerian economy. If anyone has had to visit the markets or stores lately I am certain they would be greeted by the remark ” the dollar is the cause” of price increase. Whilst I am certain most people would wonder what the dollar price has to do with the price of pepper and tomatoes. The answer to that question would be given another day.
As a largely import dependent nation, with one major export and with steadily declining foreign reserves it is clear to even the one eyed man that prices of imports and local products reliant on imported raw materials will definitely rise. This certainly doesn’t spell great news for income earners as incomes do not normally rise with prices. Your boss does not decide to give you a raise because tomatoes are suddenly more expensive.
I believe it becomes fairly obvious that the average income earner would need to roll up their sleeves and brace up for the challenges that lie ahead. Money has the ability to draw interesting emotional reactions from people ranging from fear(I don’t have enough) to greed(I want more) and that’s just the beginning.
The simplest principle to imbibe when it comes to managing money in my humble opinion is Save, Spend and Invest(in no particular order). All three are considered important and not mutually exclusive.
The most basic part of the plan. I remember from time immemorial those eternal words, “Save for the rainy day”. Whoever came up with that phrase must have experienced lack and scarcity to draft such priceless words.
Saving is very critical to making progress in life, from the 30percent mortgage down payment, to purchasing a vehicle, to retirement. Setting aside a portion of your income/earnings is essential for your progress. It must become a habit as second to your nature as breathing.
Saving is really a habit of discipline, nothing else, if the old habits encouraged poor savings then new habits should encourage saving. Maybe fewer phone calls, eating in more, home entertainment maybe, packing food from “owambes”, the opportunities to save are quite endless if truly explored.
The next question is the purpose for the savings and the response varies from individual to individual. Most experts advocate saving 6 months worth of your salary as an “Emergency Fund”. This is basically to cater for your needs if you lose your job, your salary is reduced etc. I tend to think, “So what happens after I set 6 months of my salary aside. I can live like a king right?” No! The emergency fund is just a part of the plan, you should save towards bigger projects including starting your own business, obtaining a mortgage, marriage, childbirth, investments etc. It can certainly seem a painful habit but the pain of self-denial is nothing compared to the joy of achieving a set goal.
I will stop here for now. Watch out for the conclusion next week.
Have a great week. 🙂