This is a very interesting and sensible topic but i don't want anyone to beat his or herself up because they have not been able to save the way they ought to have. it is not too late you can start today. sacrifice is the name of the game. no pain no gain. if we look deeply and sincerely into our budgets and the kind of lifestyles many of us are living,we will be able to cut off some of the extravagances and put the difference into our savings and come few months down the road,you will look back and be proud of yourself.

to cut the long story short i have lived in the U.S for almost 10yrs now and i cant boast of $5000 (five thousand u.s dollars ) in my savings account. don't blame or crucify me , after paying school fees, pay for accommodation which is close to $1K a month ,light , water and cable bills my fellow reader i will be left with nothing. oh i forget to mention car payments and insurance. and guess what also lots of family member sits at the western union location flashing my phone. i cant say NO,

way out for me was to learn how to say NO more than yes when they come with their stories. i weigh whats more important. for instance school fees or feeding will come first before broda i want to buy black berry and iphone, can you send me the money?,  i answer No to such request. sorry i might sound mean but if you dont exist or have a job the families or friends that make you not to be able to save will survive. so learn to say NO to somethings sometimes

i have set a goal for my self to save more than i spend henceforth . how is that possible huh ? its call aggressive saving. if i eat 2 meat before, i reduce it to one and eat the other the next day and that way i cut cost on food. etc. just look into your lifestyle and cut those cutable useless things down and in few months down the road u will be able to boast of some money in the bank.

don't forget your family o, if they need serious help please do o, but you have to be able to weigh the priorities. if what they are asking for is unreasonable i said No politely.

imagine my old man that doesn't even have computer skills is asking for a Laptop, what do you think my answer will be? i will leave that to you guys to answer for me, lol,  but no yab my papa o,  .  this is just my own side o, yours might be if you take  12 bottles of(star or gulder or u take shots) reduce it to 5 atleast and if na expensive champagne, reduce it to something reasonable or go cheap sometimes u wont die. its up to u well i hope we all have gained something from the post,

thanks from dualctizen.

When I came across this topic it was like I was being referred to by the poster. I got this job in June 2008 which pays nearly N200k after tax and by the end of 2009 I had barely nothing to show as savings after 1 and half yrs, this was because I spent those times attending to too many family/friends problems sending out N5k, N10k, N20k without keeping track, those called for and those totally uncalled for (just to be nice), sending money to girlfriends, buying many irrelevant stuff, taking flights locally, clubbing etc. At the end of last year, I had 2 reflect on my spendings. I made a new year resolution in January 2010 to cut down on so many things including my own life style. It was difficult at first and especially as I layed off all girlfriends but one, lol. I started saving more than 50% of my earnings and I cant believe I have saved nearly N600k after all living expenses and the year is just into it's 5th month. If I continue like this I'll save N1.2-1.5 million by the end of the year and you still have your pension set aside from your salary. People, let's keep saving for the future and in the long run you'll be happy as it will help you plan when you settle down finally into married life, right now I've got all my necessary expenditure into excel sheet to keep track. You may make enemies (people calling you ijebu and sort) but in the long run it's about you.(dont get me wrong- I'm still committed to my immediate family needs)

This is an interesting topic with informative replies. A poor savings culture is something I would like to drastically improve on but how can I successfully do that when I don't get paid on time by my employer and even when I do get paid, I am not paid the full amount.

By the time I get paid my problems/financial issues, usually get piled up to a point where each one is competing for attention.
Am wondering if i should pay my NEPA bill first to avoid being disconnected by PHCN,
Do I send money to my parents whom i haven't sent anything to in a long time?
Do I repair the refridgerator that is broken or
Do I repay the loan I took from a friend, for transportation, feeding,  water (Ooh I buy water where I live) etc etc

The list is endless, and like some one rightly said low income earners spend a higher percentage of their earnings than higher income earners. All I know is that salaried employment can really suck in Naija (especially when you are a low income earner)

Anyway am open to good advise and suggestions on how to inculcate a healthy savings culture under any circumstance. @ poster please pardon me for derailing from the original thread. The truth is I am one of those youths working without saving so I really can't make much of an input to help you

madoba:

This is an interesting topic with informative replies.

That's because people have been sharing their experiences

The truth is I am one of those youths working without saving so I really can't make much of an input to help you

Count your honest response as input.

@Pa-Ken

Do you stay in Lagos?
Do you own a car? (And at what rate does it visit clinic)
What are the regular utility bills you pay?

And you are not a starter I think so you probably have assets (Home appliances) at least the necessary ones - Confirm this.

We really need to learn from your formula

@poster,

if u ar carrying out a survey, why dont u hav a vote up there, so that u can easily have an idea of the statistics. I believe once this thread runs into more pages, u'll loose track of all the opinions

@Pa-Ken

Do you stay in Lagos?
Do you own a car? (And at what rate does it visit clinic)
What are the regular utility bills you pay?

And you are not a starter I think so you probably have assets (Home appliances) at least the necessary ones - Confirm this.

We really need to learn from your formula
[quote][/quote]
@leighcon: No I dont live in Lagos, I live in PortHarcourt
Yes I own a small car but I use it only weekends as we have a staff bus. It hardly visits the mechanic except for some routine servicing. I can afford a big car but it's not a priority for now.
I pay rent, electricity (though a self-con)
Yes of course, I have home appliances which I acquired when I newly started working. It's not difficult, you can do it. You just need to cut down on some ''unnecessary expenses''

I think the best thing is really to start small with an ideal amount (my 5% being ideal for me), and over time track your expenses, understand where the drains are coming from, and over time begin to increase your savings.

Nice thread, so it's just not me. I know it's all about budget cutting but who has been able to sucessful implement it

kemisuga:

@ otokx - they pretend to love me. And asked me to lend them some monies, promising to return back. But it is all lies. None of them return before they ran away.

But am wise-up now.

This reminds me that I'm still owing my ex 56 ton.

@Pa-Ken
I think you  leverage on joining staff bus to work, and secondly you must have cut down a lot on buying home appliances since you've acquired most of them way back (You probably were not etremely frivolous afterall). What this portends is that you don't set aside money for home appliances anymore so I think that must have helped in jerking your savings to more than 50%.

@all
From our feedbacks I am deducing that a starter has a lot of set targets to meet and may only be able to save very little  while even occasionally dipping hands into the savings.

For me I have not lived an extravagant life but I have come to realise that Lagos can be really expensive. Funny you never know how the expenses creep in.

May be we should put some figures down for proper analysis, my scenario is Lagos and residence is Mainland while office is oin the Island

Transport/M    Public Transport - N15k    Private Car fuellling   N25K
Fuel for Gen                                N12K
Lunch @ work                             N10K
Food Items @ home                   N10K
Utility BIlls(Gas, PHCN etc)         N7K
Misc                                           N10K
Phone Bills                                 N5K

Any more realistic usual bills

leighcon:


@all
From our feedbacks I am deducing that a starter has a lot of set targets to meet and may only be able to save very little while even occasionally dipping hands into the savings.

For me I have not lived an extravagant life but I have come to realise that Lagos can be really expensive. Funny you never know how the expenses creep in.

May be we should put some figures down for proper analysis, my scenario is Lagos and residence is Mainland while office is oin the Island

Transport/M Public Transport - N15k Private Car fuellling N25K
Fuel for Gen N12K
Lunch @ work N10K
Food Items @ home N10K
Utility BIlls(Gas, PHCN etc) N7K
Misc N10K
Phone Bills N5K

Any more realistic usual bills

you should add tithe, offering, gifts/donations (some you just cant avoid like office contributions during birthdays, weddings), the occassional family/friend you send recharge card or money.

Really saving takes a lot of discipline and the ability to delay gratification. but i've discovered some home truths about savings
1. save for a purpose, otherwise you may see it as loose cash and dip into it.
2. dont bother keeping up with the Joneses, cos they honestly do not care about you. the people who care about you understand where you are comming from and will never judge you by appearance alone.
3. dont carry more than you need. it will help reduce the temptation to spend.
4. begin with the end in mind and never underestimate the power of compound interest.
5. above all, condition your mind, its all in the mind

Savings eh? What does that mean exactly.

Seriously, I have no savings as we speak, zero nada zip! can you believe it.

However, when I was in Naija, myself and my husband practiced delayed gratification cos we had an end in mind, funds for immigration.

Now that we are here we are in the process of re-evaluating the best strategy for saving.

All that being said, I agree with the issue of having a goal.

What are you saving for and what is the best way to approach it. Will you pursue having investments (Real estate, stocks etc) or cash in a savings account.

Are you saving for your kids education, for a future business or just a rainy day fund.

All of this will determine what level of liquidity you need at every time, and what you can investment.

Above all, what is your risk apetite as this will determine your approach or strategy.

Now, I need to go practice what I preach! lol

@  Aproko thanks for that so for tithe, offering, gifts/donations, family/friend you send recharge card or money we add another say 18K

Sighs! Bill has already summed up to 87k without personal car 97k with personal car

More so let us work with figures for reality sake.

Thanks Nairalanders,
The responses are really encouraging and would be of immense help to the survey. A poll has been put up also as advised to track the responses better.

leighcon:

@Pa-Ken
I think you  leverage on joining staff bus to work, and secondly you must have cut down a lot on buying home appliances since you've acquired most of them way back (You probably were not etremely frivolous afterall). What this portends is that you don't set aside money for home appliances anymore so I think that must have helped in jerking your savings to more than 50%.

@all
From our feedbacks I am deducing that a starter has a lot of set targets to meet and may only be able to save very little  while even occasionally dipping hands into the savings.

For me I have not lived an extravagant life but I have come to realise that Lagos can be really expensive. Funny you never know how the expenses creep in.

May be we should put some figures down for proper analysis, my scenario is Lagos and residence is Mainland while office is oin the Island

Transport/M    Public Transport - N15k    Private Car fuellling   N25K
Fuel for Gen                                N12K
Lunch @ work                             N10K
Food Items @ home                   N10K
Utility BIlls(Gas, PHCN etc)         N7K
Misc                                           N10K
Phone Bills                                 N5K

Any more realistic usual bills

@Leighcon: let me give u a little formular which may be of help to you. In terms of transport to work, if u have a colleague who lives in the same area as u do, u could do car sharing if (he/she also has a car) alternating between the 4 weeks of the month, so u get 2 use your car 2wice in a month. If this is not the case, u may consider not using ur car the whole month alternating btw public transport and driving to work. This will indeed save u some stuff, Lunch at work @10k?? (u can get your wify or girlfriend to pack lunch for you, I mean home made lunch, it's more healthy for you and will save you a lot), 12k for fuelling generator?? (u shouldnt be running generator everyday, 5k should be okay to run gen for 2-3 hrs on days when you absolutely have to. Somebody mentioned tithe, I personally dont believe in it but make sure u give offerings when you go to church. keep aside 10k for recharge cards and miscellaneous expenses, I hope these little tips help,

@Pa-Ken
If PHCN really deals with you like they do to me anyway you will know that the 12k for Gen fuelling is even moderate thats roughly N400/day (E be like say this PHCN people sef dey one collabo with the fuel merchants). Well let us cut 3k out so we are left with 9k here.

Wify can't pack lunch for you everyday now, traffic no go gree that one 4 Lagos.

I'ld revise the list again to be;
Transport/M Public Transport - N15k Private Car fuellling N25K
Fuel for Gen N9K
Lunch @ work N7K
Food Items @ home N10K
Utility BIlls(Gas, PHCN etc) N7K
Misc N10K
Phone Bills N5K
Tithes, Offerings, Donations etc N18K
__________________________________
N81k 91k

Frivolities not yet included oo. Looking at the above realistically, which one can we adjust or drop

leighcon:

@Pa-Ken
If PHCN really deals with you like they do to me anyway you will know that the 12k for Gen fuelling is even moderate thats roughly N400/day (E be like say this PHCN people sef dey one collabo with the fuel merchants). Well let us cut 3k out so we are left with 9k here.

Wify can't pack lunch for you everyday now, traffic no go gree that one 4 Lagos.

I'ld revise the list again to be;
Transport/M Public Transport - N15k Private Car fuellling N25K
Fuel for Gen N9K
Lunch @ work N7K
Food Items @ home N10K
Utility BIlls(Gas, PHCN etc) N7K
Misc N10K
Phone Bills N5K
Tithes, Offerings, Donations etc N18K
__________________________________
N81k 91k

Frivolities not yet included oo. Looking at the above realistically, which one can we adjust or drop

I agree it is very tight but it is not every month that u give donations and gifts, u see

10k misc

dey there

today na moto, my oga just spent like 80k fixing his car

tomorrow na generator

u're a parent pikin go dey hospital

that rich dad guy had one thing right, once u have kids, you're in the rat race

Good topic, but honestly guys i've tried the "religion" of Saving but it doesn't work for me. i prefer Spending wisely.

I've notice dat d very monies u stash away for d rainy day will eventually be used up when an Hurricane comes along. When i stopped "saving" and startd spending wisely was when i found an improvement in my savings acct.

By spending wisely, i mean
* Spend wit ur head, not ur instincts!
* Chill-out (take it easy) wit d clubbing and girls
* Eat-out less (no more shawarma, pizza & stuff)
* Forget effizzi, if getting a car/good things of life becomes a liability instead of an asset, forget-bout-it.
* Give, wisely!!!

I culd go on & on but d wise folks shld hav gotten my drift by now, it all boils down to d individual knowing his/her priorities and sticking to them.

I've watched my savings acct grow astronomically since i started watching my Spendings instead of focusing on my Savings.

Abbot where are you?

Youths should save, find a policy words to motivate you to save. I learnt saving from my mum and it has helped me to date.
During NYSC, i was paid 7.5K, 5k (pri assgm) & 2k home teaching making total 14.5k; men I saved part of the money, bought a table top fridge, furnished my corper room & after service i had 50k in my account which I plan to invest into a business. unfortunately, the business could not work out. getting down to portharcourt in search of job; at ist, no job till 2005 ie from 2003. so so hussling still I saved money from handout from my cousin, change from errands, house painting etc. then in feb,2005 I got a teaching job paying 15k/mnt & I was leaving with a cousin. saving continues; I had 80k by the time I left teaching in nov,2005. infact I plan to rent a room with it but my 2nd job that paid 45k/mnt took me out of town. to cut the long story, I had 1mill in my account at a time.
but the over 1 mill investment i made in stocks went down drastically but i still have my stocks duo they dont wort the same again, at least I do get the dividends.
during 2009 my take home pay increased to 140k/mnt & i saved another 1mill which I used to get a proffnal cert. 7 paid for a 2bedroom flat in portH. now I working toward another 1 mill for my marriage plans, I plan to invest into something to achieve multiple strings of income because with family comes more expense account.

what is my principle in saving money. it changed from saving for rainny day to saving to invest. then there is this parkinson law:"it states that expense grows to meet income". if you want to have money always then break the law. let the rate of amount that goes in be far more than that that goes out, this gives you a reserve. ie it means you have to cut your expense account.

Quote from: leighcon on Yesterday at 05:28:57 PM

@all
From our feedbacks I am deducing that a starter has a lot of set targets to meet and may only be able to save very little while even occasionally dipping hands into the savings.

For me I have not lived an extravagant life but I have come to realise that Lagos can be really expensive. Funny you never know how the expenses creep in.

May be we should put some figures down for proper analysis, my scenario is Lagos and residence is Mainland while office is oin the Island

Transport/M Public Transport - N15k Private Car fuellling N25K
Fuel for Gen N12K
Lunch @ work N10K
Food Items @ home N10K
Utility BIlls(Gas, PHCN etc) N7K
Misc N10K
Phone Bills N5K

Any more realistic usual bills

you should add tithe, offering, gifts/donations (some you just cant avoid like office contributions during birthdays, weddings), the occassional family/friend you send recharge card or money.

Really saving takes a lot of discipline and the ability to delay gratification. but i've discovered some home truths about savings
1. save for a purpose, otherwise you may see it as loose cash and dip into it.
2. dont bother keeping up with the Joneses, cos they honestly do not care about you. the people who care about you understand where you are comming from and will never judge you by appearance alone.
3. dont carry more than you need. it will help reduce the temptation to spend.
4. begin with the end in mind and never underestimate the power of compound interest.
5. above all, condition your mind, its all in the mind

@Poster,
This is a very nice topic you got there. Saving substantial part of one income takes a lot gut and discipline stated by several other posters most especially by Aproko.
I am a self employed guy and i don't stay in lagos so i know lagos can be really expensive to live.
I use this as a yardstick i have friends who earn between 14k to 19k per month way back 2004, and i was already making 50k-60k per month ,what i have to do is first of all study how they survive on such pay per month and started to behave like i earn same wage like them ,this gives me room to save all i can.
But the funny thing about this savings is that when i carried out one singular project of sinking a borehole in my dad's house all the money was gone,aside this i still have bills to pay,school fees of 3 of my siblings and a host of other bills that keep coming.
About 3 years ago i reevaluate my life and my saving habit nothing to fall back on incase of emergency because too many bills to settle, business improved and i save about 1 million plus got a land and started a building project, then my earning from my business fluctuates between 180k to 260k per month ,i channel all this savings to the building project and i was surviving on small pay from borhole water business i dug initial though it is a seasonal thing.
It really stressful to save , but when saving please have a predefined goal what the savings would be used for that will realy help you to get started in life.
Mind i was staying in a free apartment all this years and just about to settle down and some of my friends i talked about above have thier salaries marginally up to about 27k -30k per month now.The building projects i embarked on now brings in residual income of about 800k a year,that is the only thing my saving habit has helped me to achieve,though is tough my people.

DONT LETS ALL GO IN SAME DIRECTION.

Any saving formular for youth (who is not a salary earner)?

And Moreover, if he/she is married? AND with Kids.

I love to read your contributions on this issues also.

^^^^^^^ do you mean married with kids and no source of income? or rather no source of steady income?

viva miscellaneous expense

my cousin misplaced his phone on his way back from the hospital where he had been helping take care of my sick son - 12k

a towing vehicle driving one way hit me this morning, scattering my bumper - as is always the case with these-----*$%! the guy had no money. plenty of begging and we can repair the bumper. in the end, after 5 hours of wasted time - i said i would put up half the money to fix my car - 20k

and the month hasn't even started yet

^^
LOL. But anyway, this topic doesn't really refer to people like us.
Young people with no responsibilities . . . I just wish!

@Ajanlekoko
Just wish what naa, ,    We young people face things too O!.
I've just being reading some formulas and honestly I've not been seeing reality in them. In an earlier post I purposely put the conditions of owning a car and living in Lagos. I have my reasons.

I like the notion of saving for a goal; else it would be extremely hard to find purpose.
The purpose and required discipline are all off-shoots of the goal.

The goal will also help you define your lifestyle instinctively. Once that lifestyle is adopted, you will no longer speak of "cutting expenses" but just living your life.

Also you'd have to ignore a lot of what 'people' say. Keep your close buddies as people who understand your world-view. Others could be acquaintances for so many other things, like business, social acceptability, aids etc.

In summary; once goals are defined, your lifestyle (and friends) would be set up almost inadvertently to meet the goals. And though to others you might seem like you're missing out on somethings, but within yourself you have internal joy and peace.

That's the way I've been able to develop my own savings culture.

Please enjoy your money, there is no point amassing wealth if you don't know what to do with it, the future is quite uncertain. i believe savings should be used to solve your day to day problems that is why you opted to work in the first place. besides when you have successfully saved lets say 750,000 in a year what stops you from fighting the temptation to blow it away after so much sacrifice of saving it. you would always have that comfortable feeling that you have 750k in the bank.

@abott

I think 0-5% should be included in the poll so that you won't be disenfranchising some (a lot) of people.

^^
Seconded. I would vote in the 0-5% category.

I even have a theory about savings. The more disposable cash you have, the more likely you are to spend it all at a go, especially to satisfy demands from family, friends and the like.
Nowadays, the bulk of my money goes to service debt incurred as a cost of CAPEX, namely construction projects. I don't bother to save more than 5% as actual cash savings. I'm part of a co-op at my workplace, so my actual savings go in there.
Therefore, even if I am potentially able to save 40% of my income, I would rather go and, say, buy a house or something, and use 35% of my take home to service the debt incurred as a result of that capital expenditure. And save just 5%. Nobody can just show up and make random cash demands from me, cos I hardly ever have to spare.

@OP seriously to get valid results 0-5% category is needed.

@Ajanlekoko
To have adopted this strategy then you must have initially accumulated enough savings which you can fall back on at any time. Am I right or something?

^^
Of course not. You can never save enough, really. 'Fall back on' is a myth.
Even if I lost my job now, and I had saved, hypothetically, 10 million naira, it's still not enough to fall back on, frankly speaking.
Remember, it is not the lump sum that matters, it is how you use it. You can have ten million naira today and fritter it all away due to no direct fault of yours, and someone else can make 500 thousand into 20 million, just by clever application.

The economy can't even grow by people saving. The economy grows when people spend. Silly ain't it? Not really. Look at nations. They spend on infrastructure and development projects that would lift the economy and generate additional income, put in a little reserve, even borrow money sef, to fund further development projects. Imagine if a government never spends, but only saves.
You could say that I am running my personal economy like a government.