The other day I was reading from the Zimbabwe`s first billionaire, Strive Masiyiwa.
He was talking about what can be done to increase the number of the wealthy people in the world. His prescription will surprise you…
Let more people open bank account.
Too simple to believe, yet, saving helps in the journey to riches.
One major problem in this generation of ours is that most people are spenders.
If you desire to know how to save money, I’m here to help you with the following 29 tips.
1. Identify what you will do with the saved money.
Even before you`ll think about saving money, you have to identify your destination… what do you need to save money for? Why do you need to save money? How good will it be to get
what you desire to save for?
These are the questions to answer because if you don`t know why you`re running, you cannot run or you will be tired of running soon.
Do you want to save money to acquire some assets? Do you have to save money to build your own house? Do you need to keep money to be able to start your own business?
You have to get your why ready. If you don`t, you won`t be able to save money, instead, you will be a money spender.
2. Build the attitude first, not the bank account.
I know you want to save money so that you may have certain amount of money to buy certain things, but you see, cultivating a saving habit is like other habit.
You may have to start little (most especially when you earn very little income).
Focus on building the habit first.
Most people usually think, “I’m earning only #50,000 per month. I have wife and three children. How do you want me to save money with this little income?”
The problem with such people is, when they start earning #100,000, they will still not save money and when they start earning #500,000, they will still not keep any money.
Why is this so?
They lack saving habit.
Saving habit is like giving habit. When you have #1000 and you cannot give #50 to a friend in need, who told you you`ll be able to give #100 when you have #10,000?
Now even if you income is small, start to be cultivating a saving habit.
Don`t look at the amount you`re keeping now. That`s not what is important. The number one important thing to look at is the habit.
Make sure you`re saving money regularly (no matter how small)
What will happen is that, very soon, you will love keeping money so much that you will be addicted to it.
When you get to this point, you don`t need anybody to inspire you to save more percentage of your income.
3. Get the picture of what you`ll have to do with the saved money.
Maybe you don`t know, let me tell you. Human being do things either to earn pleasure or to avoid pain. The only two reasons behind every of our action is either to get some pleasure or to avoid some pain.
Why do people buy cars with borrowed money even when it may be stupid to do so? Because they derive some pleasure riding car.
Few weeks ago, a female friend of mine told me, “see, I always buy things and immediately hate them”. She hate those things because she never needed them in the first place… she only bought them with the hope of deriving some pleasure in having them.
Now here is where I am going.
If you can create a greater pleasure in your heart in association with what you will use the saved money for, you will be able to avoid spending money on things you don`t really need.
About three days ago, the woman in my life was telling me, “all the money you should have with you, you have invested them in your business. Now you`re not having money”.
She will be happy if I am having so much money I can spend now, but I’m smarter than that. Most times I will invest the token I have, even when I know that will affect my daily living.
But, how do I get courage to invest instead of spending?
Because I always imagine what it will mean for me to have enough money in the future. This imagination gives me pleasure (which is greater than what spending will give me)
Whenever the picture of what you want to do with the saved money gives you more pleasure than what you can get from spending your money now, you will naturally know how to save money.
4. Differentiate between wants and needs.
You can believe me if you want to, more than 50% of things we buy are wants… we don`t actually NEED them in the first place… we only want them because we see other people using or having them.
When you watch ladies so closely, you`ll see them looking at other ladies as they walk on the street. Right on their mind is communication like, “this top is beautiful on this lady, I should buy one like it”, “and this skirt is smart on this lady. It makes more men to look at her. I will buy one like it”.
Though these ladies have more beautiful clothes at home, you`ll still see them buying more… simply because they see those style on other ladies. That`s satisfying your want, not need.
Some men will start planning for a new T.V just the day they see a new, fashionable T.V in their friend`s sitting room. They`ll feel like, “Joe has bought that television, it makes his sitting room more beautiful. I have to buy that T.V too”.
Advertising is another enemy we have. Whenever we read or listen to advert, we instantly desire to get the pleasure the advert promises, so we start planning on how to spend our money on those things we see in the advert.
To be a good money saver, you have to make sure you ask yourself this question before deciding on whether to purchase something or not… do I actually need this thing? Can I live without this thing? What is the worst that will happen if I don`t buy this thing? Will it really hurt?
Let`s move on…
5. Cut off certain percentage of your income… even before you get it.
There is this wonderful concept in a great book call, The Richest Man in The Babylon. That concept is… pay yourself first.
The author of this book, George Samuel Clason explains how people are used to the poor attitude of paying themselves last.
Even before most people receive their monthly salary or any other form of income, they will sit down and list what and what they want to buy, from food to clothes, vacation and phones.
By buying all these, you`re simply paying the owners of the companies that produce those things. Any wonder why the rich are getting richer?
So what usually happen is that you pay yourself last… or you don`t even pay yourself at all (because you have spent everything you earn on things you want (not need)
But what if you could pay yourself first?
Yes, you can.
Let me give you an idea.
What if you can instruct your boss that he should remove 10%, 7% or 5% of your income (even before he pays you) and send it to a special bank account which belongs to you, but which you don`t have easy access to?
6. Have a special saving account
What if you open a bank account and don`t collect the ATM card for the account?
This little difficulty in entering bank hall to get your money can really help you to save some amount.
Keep a certain percentage of you income into this account and you may be good for it.
7. Get a locally made “bank”.
There is this saver our fore father invented. They usually build it with wood or clay soil. Everywhere will be covered, except a little opening you can use to pass money inside.
You may get one of these local banks and start dropping some extra cash inside.
At the end of a year when you`ll open this “bank”, you may be surprised at how much you have saved.
8. Eat nutritious, not expensive food
In today`s world, costly or delicious meals are what most people go for. I am glad to tell you, delicious isn`t the same thing as nutritious. You may love to eat the expensive meals at the fast food restaurant, you may love those costly ice cream and sweets, but they are neither good for your health nor for your purse.
Vegetables and fruits remain the best food ever. Fish and many other natural foods are there for you. Yes, they may not kill your neighbor with the aroma, they may not feed your pride of eating in “big restaurant” as well, but you can be sure they will save you money and health.
Pay attention to the nutritional values of the meals you`re taking and not the price. Go for cheap and nutritious meals.
9. Write down your expenses
Get a notebook where all your expenses will be written. At the end of the month, you will see how you`re spending your money.
What will surprise you here is, first, you`ll see how some trivia expenses has added up to become something big.
Second, you`ll see for yourself how some things you`re buying are not what you actually need.
This will help you to reduce some unnecessary expenses.
10. Enjoy nature as vacation.
If you`re the type who loves to have vacation in exotic places, you have to see how you can have your vacation in some less expensive places or even spend time with nature.
Believe me, with some creativity and findings, you can find some cool places where you and your loved ones can spend nice time together without wasting much money.
11. Take your children to the bush, not zoo
Our forefathers entertained us by sitting us down on the night moon and telling us stories. Two days ago when I was asking my 10 years old cousin what she knows about moon, I discovered she only knows the theory her teacher taught her.
What we do today is to expose our children to T.V and movie, then sometimes we take them out for excursion in some places where we have to pay to have access (I.e. zoo).
We get to this point because we have been brainwashed to think that you have to pay for anything for it to have value.
Can`t we take our children to some natural and free scenes? Won`t your children enjoy to see the river, the moon or even the bank hall?
Must you pay to take your children out?
You can take them to the bush instead of zoo. Lol.
12. Stop drinking and smoking.
If you`re a drunkard or smoker, you know how much you`re wasting on this two bad habits.
13. Develop your self-esteem
Why do we buy things simply because our friend buy them?
When you think you need other people`s approval for you to live your life, you will naturally buy things you think will earn you such approval.
If you are courageous enough to live your own life without comparing yourself with others, you will save more money because you will not just buy something because you see people buying it. You will buy what you need… alone.
14. Don`t buy new model
Some things like car are usually expensive when they are new model. Is it a must you buy a Toyota made this year?
15. Don`t buy big clothes.
Truly, the clothes you wear determine how people treat you. But you know something?
Most people cannot tell the difference between the cloth of #5,000 and that of #20,000 provided you`re neat.
And one more thing you have to know is that, clothes only give you the opportunity to earn good grade in your first meeting with people. When people move closer to you, they start paying more attention to who you are, what you know and what you do while paying less attention to what you wear.
You don`t have to buy big clothes. Wear good and neat clothes and invest in your mind by reading some good books. This will boost your image in people`s mind because you will become a better person (you may click here for some wonderful business books).
16. Get a deep freezer and buy in bulk
Some of the food stuffs you need can actually be bought in bulk and kept in a deep freezer. This is a good way to save money.
I know. I`m an African like you. There may not be stable electricity in your town or area. I`m sorry. Things will be better soon and there will be electricity.
17. Live in a cheap place
I once had an older friend who was working in a bank at Lagos (Nigeria). At a point he had to relocate to one of the most expensive places in Lagos (V.I or there about) where he might be paying #500-750,000 annually for rent.
If you are living in an environment where accommodation is too expensive, you might consider moving to a cheaper place in order to save more money.
18. Take a list to market
Whenever you want to buy something, make a list of things you want to buy before you go out for shopping and stick to that list. What happens many at times is that we are carried away by many “nice looking” things in the supermarket or shopping hall that we buy more things than we actually need.
19. Give money
I know this is funny. You want to know how to save money and I am here telling you to give money.
Let me explain myself.
When you give money, you are happier and feel successful. In this state of mind, you will need less material to live your life.
Haven`t I told you before? A lot of people spend more money than necessary because they are not happy… so they want to buy happiness.
20. Take public transportation
Buying a car is a capital expenses. But not just that, maintaining a car is a huge expenses. Can you consider going with public transport instead of owning a car for now?
21. Clean your home yourself
Do you have some bush around your house and some other things you want to get done? Don`t border yourself. Get your body warm. Doing those things is an exercise, at the same time, saving you money.
22. Investigate the best calling rate.
All these little things really add up to become huge expenses. I am a fan of MTN (a mobile telecom company in Nigeria) and I was using one of their plans they call MTN Purse in all my MTN lines (about five of them).
At a point, I tried to check their MTN zone plan with calls and guess what? I have wasted a lot of money on calls in the last 3 years. Now I’m spending about 30% of what I was spending on calls in the past.
All of us call. Some of us call a lot. Why can`t you take time to investigate a cheaper calling rate so as to save some money?
23. Don`t make friend with extravagant people
If your friends are spenders, so will you. If your friends are extravagant, so will you be.
24. Don`t subscribe for unnecessary cable or satellite channels
25. Buy durable, not flashy things
26. Stop buying burial and wedding clothes
Must you buy every burial and wedding cloth you`re called to buy?
27. Get marry.
Yes, do you know that getting married may help you to save money?
Many single guys and ladies are out there wasting money on their 3, 5 girl/boyfriends, spending on just anything, eating in the restaurants and engaging in some other money-wasting activities.
Getting married to the right person can help you to save more money, especially if both of you are working.
You may not have to be eating in the restaurant anymore. You may not have to be giving money to girls anymore. You now have someone who can hold you accountable and help you to manage your finances… provided he/she is of good head anyway.
28. Don`t waste money on wedding, think about marriage
If you are still a single, do you think you really need to waste one million naira on wedding? Wedding is an event, marriage is a life. Be courageous. Don`t be like many fools who spend all they have on wedding. Some people even went as far as borrowing money.
29. Don`t waste money burying your dad
I know someone will hate me here. But you see, wasting your money burying a dead father while you think you`re honouring him is not reasonable. Believe me, the dead is gone and cannot see your so called “honour”.
If you have some cash, spend it, but never inconvenient yourself in order to kill cow for some people to eat.
Above are some tips on how you can save money.
Thanks for reading.