My Monthly Steps Towards Financial Freedom

When I posted the article on “Can’t save or invest with a monthly income of N58,000 – Let me teach you how? I realised the article was going to attract a lot of attention and this was my aim. To wake us up from our financial slumber as Nigerians. I believe if I could do it, several more can also do this. This article is a follow up to the above named post. I await your reactions and comments.

I have been asked this question a couple of times by friends and colleagues “how do I manage my finances?“. The answer is simple – live below your means. While I realize that we have a lot of financial responsibilities at the home front. Trying to live up to society’s expectations will ruin our goal towards achieving financial freedom.

These are some of the things I do on a monthly basis to get myself out of the rat race.

Every month, make a habit of setting aside 70% of your monthly salary for investment (applicable for a single person) while for a couple, I advise a minimum of 30%.

I always tell my friends that it is possible to live within the month on a shoestring budget of N10,000 but I’ve always had different opinions about the wisdom in this. If you have not been living on a shoestring budget, take a gradualistic approach.

For married couples, I advise you have a minimum of three months salary as an emergency fund. For singles, I advise that you have a month salary as an emergency fund. I treat my savings as a bill/debt which must be paid ASAP. I don’t know what your opinion may be. I’m interested.

Secondly, I bring my food from home throughout the week; I do not lunch out at fast food outlets. I have long realized that it is one of the fastest ways of eroding money from your wallet. Imagine if Mr. A spends N800 on a daily basis at his favorite fast food outlets. On a weekly basis he will be spending a total of N4,000 and on an annual basis that is a total sum of N48,000 on lunch alone. Imagine what that amount would have earned if it was left sitting in an interest earning account or invested in a stock portfolio. I have learnt to be creative with my cooking.

We live in a nation where each family has a huge number of dependents. Responding and satisfying monetary requests from dependent family member is a Herculean task that gradually removes more money from our wallets. What I usually suggest is to list each request as it comes in. I do not grant more than three requests in a month and once my list is full, I move the next recipient to the following month. This allows me more freedom to manage my resources efficiently.

I do not indulge in monthly shopping sprees. I have narrowed my shopping for clothes, shoes and bags to once a year and I usually have a fixed budget for this activity. During my service year, I spent my monthly salary on Italian shoes, bags, skirts and shirts. This attitude left me without any savings and at the end of service year, I only had N30,000 left in my savings account. Those clothes are now whiling away in my wardrobe due to my present job (semi-formal/casual). I usually schedule my shopping activities towards my annual vacations.

I usually suggest a separate account, which I refer to as the ‘welfare account’. Every month, save a minimum of 5% of your monthly salary. This account will be used for shopping and other items you intend to purchase. Before shopping for anything, make a list of the things you will be buying and stick to this list.

The SHOPRITE /SILVERBIRD/CITYMALL/NUMETRO MANIACLagos is the home of entertainment and leisure. Judging by the way people troop to the above named locations on a daily basis, these outlets are also smiling to the bank on a daily basis. While I agree that groceries and foodstuffs sold at Shoprite is relatively affordable almost at par with the open market, I do not see the reason why families would make a trip from locations such as Berger, Okokomaiko, Festac, Ejigbo to the Island just to buy shredded beef. Save those long trips for family day out which will afford you the opportunity to bond with your family. I know a couple of individuals who visit these outlets on a daily basis to watch films and also do a bit of window or actual shopping. I understand the maximum fee for going to the cinema is N1,500 for adults and N500 for children. That is N90,000 free give away to these cinema houses and other forms of entertainment we indulge in.

Emotional Spending – I have learnt not to shop when I’m tired, angry or depressed. I usually end up buying what I don’t need and at outrageous prices.  A tired, angry or depressed mind is susceptible to clever and brilliant advertising. What I do is to save my shopping till Saturday morning and I usually go with a list of items that I strictly adhere to. I have discovered that when I shop in the early hours of the morning, I’m more alert and less susceptible to fanciful packaging and brilliant adverts.

4 thoughts on “My Monthly Steps Towards Financial Freedom

  1. Michael says:

    If what i read in your blog is true, then u are not just that wise but very unique…and for that i really do respect you.

    Tho i have to ask and i really hope you respond. When will u start enjoying this wealth? Do you have a target?

  2. January says:

    Hello Michael, what you read is very true cos I apply these principles on a daily basis. I intend to retire at the age of 40 unless something goes wrong or I make a career change that allows me more flexibility than what I have right now.

    As soon as my investments can take care of my monthly expenses, i’ll be signing off from the workforce. One of my reasons for desiring financial freedom is to pursue other interests I have for the creative arts and photography. I also love international travel which I commenced ths year. So these are some of the few things I intend to spend this money on. Besies, I intend to support my unborn children (partially or total) if they choose to go to a top rated graduate school.

    As for applying most of the principles I’ve outlaid on this blog, I usually advise a gradualistic and realistic approach especially if you’re not used to living on a shoestring budget. Hope this answers your question.

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