Was discussing with a cooperative member today and he said he was waiting for increase in salary for him to increase his 2k monthly savings to 20k and I told him he may wait for ever. Because the disposal incomes are rarely enough this days because of high cost of essentials. And I told him that the wise thing to do is to not necessary increase his savings to 20k when his pay increases but that he can just do 5k and he would be shocked that he would still be fine after a while with that increase of 3k.
The arguement became intense almost all supported his proposition that he must remove spending before saving what is left.
Please which one should come first because we did not finish that conversation.
Alex ejikeStarter
Let me explain this in a simple and relatable way so that everyone, including Mama Ngozi in the village, can understand.Imagine you have a bowl of garri, and you want to make the garri last longer because things are expensive these days. You have two options. One, you can scoop out the exact amountRead more
Let me explain this in a simple and relatable way so that everyone, including Mama Ngozi in the village, can understand.
Imagine you have a bowl of garri, and you want to make the garri last longer because things are expensive these days. You have two options. One, you can scoop out the exact amount of garri you need for one meal each time. This is like spending first before saving whatever is left.
Now, let’s think of the other option. You scoop out a portion for saving first, say five wraps of garri, and then use the rest for your meal. This way, you are saving a little bit right from the start.
So, when it comes to money, it’s similar. If you wait to save after spending all your money, you might not have anything left to save. But if you save a bit first, even before spending, you’ll always have something set aside for the future.
In the case of your cooperative member, instead of waiting for a big increase in salary to save more, it’s wiser to start with a small amount like adding 3k to his savings. This way, he can slowly increase his savings without feeling the pinch of a drastic change.
Remember, just like taking a little garri out for saving first can add up over time, saving a bit of money regularly can also help you achieve your financial goals, whether it’s buying something you need or planning for the future.
See lessit is save before you spend This financial principle is often called "Pay Yourself First"—means that the moment you receive your salary, you automatically set aside your savings before you spend money on living expenses, bills, or non-essentials. If you save only what is left over after spending, thRead more
it is save before you spend
This financial principle is often called “Pay Yourself First”—means that the moment you receive your salary, you automatically set aside your savings before you spend money on living expenses, bills, or non-essentials.
If you save only what is left over after spending, there is rarely anything left to save.
that is why you need to form the habit of saving atleast 10 % from your salary.
Let me tell you how this can hel
The Power of Saving 10% First
When you save at least 10% of your salary upfront, you do not just build a financial safety net; you gain capital that you can invest back into yourself to increase your earning power.
Here is how saving 10% creates a continuous cycle to grow your salary:
Builds Capital for Self-Investment:
Saving 10% creates a dedicated pool of money. Instead of letting that cash sit idle, you can spend it on resources that make you more valuable in the job market or in business:
Skill Acquisition: Paying for professional certifications, specialized courses, or technical training.
Tools & Technology: Upgrading equipment, software, or tools that increase your work efficiency and productivity.
Networking & Mentorship: Attending industry conferences, joining professional associations, or taking key people to lunch to build career-advancing connections.
Unlocks Higher Earning Potential:
As you use that 10% to acquire new skills and credentials, your value as a professional increases. This puts you in a position to negotiate a raise, apply for higher-paying positions, or launch higher-value side services.
Creates the Upward Growth Loop:
You earn a base salary.
You immediately save 10% and invest it in high-return self-development.
Your enhanced skills lead to a salary increase.
Your new 10% savings amount is higher in total dollars, allowing for even greater future investments in yourself.
See lessI think both sides have a point, but from a personal finance perspective, I believe saving should be planned before discretionary spending, rather than waiting to see what is left at the end of the month. For example, imagine someone earns ₦200,000 and currently saves ₦2,000 every month. He says, “WRead more
I think both sides have a point, but from a personal finance perspective, I believe saving should be planned before discretionary spending, rather than waiting to see what is left at the end of the month.
For example, imagine someone earns ₦200,000 and currently saves ₦2,000 every month. He says, “When my salary increases to ₦300,000, I will start saving ₦20,000.”
My concern is that he may eventually earn ₦300,000 and still say, “Things are expensive now, let me wait until my salary increases again.” Before he knows it, his income has increased but his savings haven’t.
Instead, suppose his salary increases to ₦300,000 and he immediately increases his savings from ₦2,000 to just ₦5,000.
He now has ₦295,000 available instead of ₦300,000. The difference is only ₦5,000, and after some time he may adjust his spending and realise that he can actually live with it.
Then when his salary increases again, he can move from ₦5,000 to ₦10,000, then ₦15,000 and eventually ₦20,000.
The important lesson for me is that we shouldn’t wait for a “perfect income” before developing the habit of saving.
However, I’m not saying someone should save so much that they cannot afford food, rent, transportation or other necessities. The amount saved must be realistic.
For example:
Income: ₦200,000
Essential expenses: ₦170,000
Savings: ₦5,000
Balance for other spending: ₦25,000
When income increases to ₦250,000, instead of allowing the entire ₦50,000 increase to disappear into new expenses, maybe increase savings to ₦10,000.
So for me, the principle is simple: don’t save only what is left after spending. Decide what you can realistically save first, then organise your spending around what remains.
Because if we keep waiting for our income to become “enough” before saving, there is a real possibility that our lifestyle will keep increasing alongside our income.
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