LEARNING TO SAVE

While discussing with my brothers some days back, one of them made a statement that struck us as very true even though we never thought of it that way. He said " For a man to be rich, he has to be stingy to himself first." Note that he didn't stop at being stingy, because if he did, then a lot of people will misinterpret this saying and include being stingy to the less privileged. Some people may disagree with this statement but let me just say, " Have you ever come across a rich man who has worked hard to make his money that spends it without thinking first if he really needs to?" Based  on this, I thought to my self, people want to get rich but have no idea how to go about it, why not write an article on learning to save. 

The first thing to learn in saving your money is budgeting, and learning to pay yourself a salary i.e. keeping some money aside form your salary as your savings. You have to spend less than what you make not more. Now being stingy to yourself doesn't mean going about in shabby clothings or starving to death. No! not at all. In this context, it means asking the question "do I really need this? before spending the money" If you have 50 pairs of shoes at home and you pass by a shop and buy another pair without asking this question, very quickly you might find that you don't have use for it and so it joins the many unused pairs.

Whether you are a stable salary earner or businessman, there is room for you to save some money for the rainy days. If you are going to start the process of saving there are a few things you need to start with;

• Some exercise books and pens, based on the category (salary earner or businessman) you fall into you may need just 1 book, the most important one - THE EXPENDITURE book. The remaining 2 books are for the business guys and they are THE PURCHASING/STOCK book and THE SALES/PROFITS book.
• Open 2 bank accounts, 1 for monies earned from business or salary and the other one for savings. If you are both a businessman man and a salary earner then add another account to it and separate your salary account from your business account.

SALARY EARNER:

Here your income is fixed so its much easier. Your basic monthly expenditure are tithe, feeding, transportation, miscellaneous (cosmetics, airtime) and basic yearly expenditure are accommodation, school fees and supplies. Let's not forget you may have dependent relatives too. You have to experiment with one month. When your salary comes in, pull out the expenditure book and write down your budget;

• Tithe
• Feeding: eating at home (cooking your own food) or take outs
• Transportation: public using buses or using your private car (fueling)
• Miscellaneous

If you cook your own meals, buy your groceries in bulk say once in 2 weeks or even for the month and see what extra foods you buy as the month goes on, note it. If you eat out, how often , how many times in a day and how much does a meal cost depending on your choice of restaurant. Multiply this by 30 days and you get your feeding expense for that month.

Check how much it cost you to move about to your basic places like work, church, market e.t.c. for a week  , multiply by 4 and you have your transport expense for the month. Add a little extra for impromptu movement like visiting friends. 

When you have determined the estimate of your monthly expenditures, move the rest of the money unaccounted for to your savings account. Aim to save at least a half of your salary or at least a third of it. 

If you are married then you have even more responsibilities. Before you decide to have children, even if they are a blessings, be prepared because they come with antenatal care, diapers and baby foods, school fees and a constant wardrobe change as they grow up e.t.c. then multiply that as the family size begins to increase. Try to pull resources together with your spouse especially if she works (resources may also include ideas on how to cope better).

BUSINESS PERSONNEL:

You already know what books to have and your basic (monthly and yearly) expenditure and how they can be calculated. You may decide you further separate the books like "the sales/profit book". Do whatever works for you, but you must be able to;

• Take stock of your goods and products regularly. You should have a storage (e.g. a warehouse) to keep all your products from where it goes out to the shop in batches. Take a stock of what goes in and what comes out, that way, you'll be able to monitor your profits, turnovers and losses. All these go into "the stock book".
• At the cash register, whatever is sold should be entered into "the sales/profits book"
• "The expenditures book should be divided into 2 parts, a part for all business expenditure and the other part for the personal expenses. Note that the business expenses is gotten from the business account and the personal or work related expenses from the salary account after the savings have been pulled out. Try not to mix the accounts and expenses.

Finally, My personal advice is to choose trustworthy people to work for you and you can enter all the details of the books into a computer as it makes everything easier.

If this article helps you, let me know, love to hear from you. Cheers.