By Akpeli Othuke Andrew
1. Pay yourself first: Reward yourself from your earnings before you start spending on other things. Put at least 10% of your pre-tax income into a savings account.
2. Spend less than you earn: Spending less than what you earn gives room for savings, while spending more than what you earn lead to unredeemable debt status. Stopping spending and start saving.
3. Pay your bills on time: Paying your bills on time saves you from unnecessary penalties, fines and interests thereby helping you to save more of your income.
4. Avoid debt as much as possible: Debt is defined as mortgaging for future for today’s benefits while savings is mortgaging immediate benefits for future enjoyment. So avoid debt to the extent possible. Though loans like student loans and mortgages can be ‘good debt’, make paying them off a priority.
5. Set a budget: Calculate your total monthly earnings and estimate your expected expenses for the month. Ensure that your expenses are lesser than your earnings and avoid unnecessary expenses and try to notice pressing needs and the not very pressing needs in your budget and treat them in order of importance.
6. Set concrete goals: In incurring capital expenses, ensure that you set realistic goal. They are better purchased with savings than from just a monthly income. Know when you want to buy a new home, when you want to retire, and how much you are expecting each to cost you. As save toward it by setting a realistic purchase date.
7. Have an emergency fund: This is defined as a savings account designed for unforeseen circumstances, for example, unexpected retrenchment. This is not for use in day to day running of your home or for settling of capital expenses. Have at least three months (some say six) in a high-yield savings account that can be easily accessed.
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