Envelop The Money

Have you ever spent more than your pocket can carry? I was a victim of my will! By my new calculation I shouldn’t spend, more than 30% of my salary on transportation and other daily necessities like Calls, Food, etc, (to me,) they are miscellaneous needs in actual facts, but most times find their way up on my priority order. So, I deviced a means of forcing them down in order to stay afloat. Your case may be different but if you can look closely, you may find a relation.

Miracle still happens…

One very good Sunday morning, while on youth service in Jos, I discovered that I need to pay my tithe, and that morning, the only cash on me equals to the amount required for the tithe, offering and transportation to and fro; of course I shouldn’t tell you that I have to go a hunger until another credit alert is received. But It was a great battle, and I wan. To cut the story short I met this old family friend at the church gate, and after normal greetings he pulled out an envelop from his suit and forced into my hand the same amount that I gave out in Tithe. I counted it when I reached home any way – it was a miracle! Common, as a corper, you know what it means to give without hope and for that hope to resurrect. It came from a brown envelop. God did it.
After my last financial crisis, I bought a pack of envelops (white in color) and marked the first seven (i.e Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, and Sunday). Each day has its value. Then, I discovered that I spend more on weekends than week days.

Working days

Working days has equal content and the leftover (though rare) is place in a “Change Bag”. Food surfer more, while Transportation is well place. Except that one have to wake earlier than before to board a cheaper bus.

Weekends & holiday

Always create room for relaxation and connection with friends. This usually happens on weekend and holidays, so get prepared, otherwise package yourself some where. Make sure your gifts and offerings are well planned – you lend to God when you give and good measure is always expected. On a serious note, entertain your guests and treat them in your best manner, but don’t burn all your money on beer, drink responsibly.

Calculate & Package

Now, having known your needs and calculated your anticipations, align your finances to meet them. Get a pack of envelop, I do suggest, label each according to choice and stuff the fund in the order of necessity or as planed. the Label may read:

1.  Days of the week or Dates in the month (Monday – Sunday , 1st October 30th October or 1st, 2nd, 3rd,....31st) or
2. Title of Names of Need (Transportation, Food, Tithe, Kitchen Utensil, Rent, Bill).

This will help you to use less of your ATM cards and cheque books – since you will be encouraged to leave them at home, while maintaining a good savings or Financial Record. Remember to carry over or strike out (if possible), every need that can not be met.

Finally, note your spending, package your resources in preparation and make use of your wallet where or when necessary.

Save While You Work

One lecture I never had while in school, was how to save while working. In fact there was no lecturer to handle that as a course; the best they could offer was to show us how to manage a business and to balance a petty cash book (i.e basic bookkeeping), this anyway should mean, how to calculate our income & expenses, to know our savings.

Here on the street, Life is the best teacher! It will show you need to save while you make the money - no matter how little. 10% will be a good start, and 80% is most welcomed. But the challenge remains “how to get the money” to save, or how to make money obey your “stay” command. There are a lot of articles and publications on how to save, and am not going to repeat any here, but will give you a little guide based on my own experience. Here are some questions you may need to answer before we proceed,

1.      What is your income (i.e. How much do you make per day, month or year)?

2.      What are your basic needs?

3.      What are your miscellaneous needs?

4.      Which of the needs are most important or critical (required urgent solution)?

5.      How much is required to meet each need?

6.      Get a total-sum figure called NEED, compare with your INCOME (1. above), and subtract NEED from INCOME; how amazing do you feel?

Make a list

It’s not puzzle, get pen and paper and do the little arithmetic. Tell me about the Wahoo! Feeling.

Let’s start the digest – your income is what you receive as per value of your time in the market place. Your basic needs are those things you can’t do without, while miscellaneous goes as named. A need may require a critical attention (even if it’s a miscellaneous one). One truth is that all needs stands tall and desires much more preference against the other. The way out is to set a preference order i.e. to arraign them in list of preference i.e. order of importance.

The Spending begins…

All need must not be met! There are some that must be carried over (sometimes in a continuous order). From your list, select the very important ones that your current bank account can carry. You may not finish the payment but as long as other needs don’t suffer, go ahead; but, I must warn you, avoid credit with all pleasure.

Pipe: Cup or Hole

As you are spending, remember the days of want. You will have to go to work, feed, change clothing – do the bathroom duties and even give offering during religious activities. Watch where the money goes….A pipe? No verify if it’s a Cup or a Hole. If it’s the former, don’t worry you will get it, but be careful the later doesn’t keep a promise. Even a savings product/program can become a hole; I think stockbrokers and landlords of demolished properties will tell better. Hence, you have to open your eyes very well to note that the pipe has a solid covering at the bottom before putting your money.

The difference between your expenses and income, according to rich dad is your Savings. You have to make a choice on how to handle your savings. The list of savings product is endless. Ranging from (old school) piggybank or (under bed) savings box/can to cooperative society or financial institution managed savings packages like,

a.       Ordinary savings or Current account

b.      High interest or yield accounts including Fixed/Term deposit

c.       Bond/Treasury bill

d.      Mutual Fund, etc.

Examine each product very well; note your earning ratio, especially the risk involved, before committing money. Also verify the history of the financial institution of your choice and check references where necessary.

How much?

Sometimes the amount you keep as savings should not be determined by your present need. You can make a mandatory monthly savings. Personally I have a mandatory 30% savings plan, since I have to spend about 28% of my monthly take-home on transportation. So, any leftover from the “spending”, falls into the cup. Remember, your savings and amount earned as interest tends to grow with the more deposits or contributions you make.

Call it Project A, B….Z

Most wishes are better achieved when they are regarded as projects. So to buy that new car or electronics, the only way to save towards it is to draw a Non-Credit-Purchase plan. How will this work? Note how many installments you can be allowed for the product/service and then save accordingly or in further installments. For example, if a 32” LCD TV costs 60K and the shop can allow only two installmental payments, and your income will also allow this, then pay yourself the installments before going to the shop otherwise break it further into your comfort zone. Take no pleasure in credit; it is not friendly – no matter how appealing it appears.

Who ate your school fees?

Develop yourself, be good on the job. Find time to attend professional classes and gain higher degrees. Your motivation should be where you wish to be tomorrow, because you are already in your future. Prepare for every “next” level, yes with the little you receive today. It is advisable to invest at least 3% of your income in self development/career advancement, by this I mean becoming better at what you can do. Note this, by providing solution both for yourself, and others, you are creating opportunity for further income.

Family Matter….

Mind your family, try not to carry the entire burden from home, but do your best. If you are not married, you will some get your own family. Save towards your children’s education, if possible insure it. It is not a bad idea to start contributing for your unborn child's education now. I know some insurance company that can take that burden from you. With this, at your later years, you may have lesser burden to carry.


Cut the Beer...
Check where the pipe is leaking, if it is on your daily consumption or weekend groove, try patching by cutting off some unnecessary activities you enjoy. Take your health seriously, use insecticide treated nets and wash your hand always. Personal hygiene should be treated with seriousness - make it a culture.
  

Finally my Brethren...
Just like "Little drops of water makes an ocean", so will a continuous contribution make a mighty savings. Your need will not end after meeting the present pressing ones, the on coming ones are greater and will demand more attention and will induce much more pressure if you are not prepared, for example, compare your present needs, and the former. A good savings culture keeps you standing when others are kneeling.