Many people still don’t understand that being prepared when it comes to their pocket also makes life a lot easier. Especially in third world countries like mine: Nigeria. They leave everything to chance. If it works, then it works but in reality, when you don’t plan, you become part of a plan.
In this post, I would like to show simple budgeting techniques to manage finances better and be better prepared with what we have. If you earn a salary or like me, you’re mostly surviving on Hive/Crypto, then this is for you. If you run a business (self employed), this is also for you.
1. Assess your Expenses
How big is your family? Do you live alone? What is your rent like? Do you have other responsibilities aside from eating and clothing yourself? Are there other things about you that must be considered?
You first need to get a clear view of what your life is like. What are those things you spend on the most? How often do you spend on them? You can make a list for better clarity. When you make the list, create a priority chart and order them by most needed to least wanted. For example, transportation is almost a daily thing for my household. What I do is calculate how much we would need to spend for that entire month and set the money aside.
I have these envelopes that I use in separating what for what. On each, I write what the money's for. This system might not work for everyone but it works for me. You might be better with banks but I do well to withdraw and distribute. Then I look at what I need to stock up in the house. Cooking gas is always number one. I have two cylinders, 12.5kg and 6kg. The 12.5kg lasts a month sometimes more, while the 6kg is to take care of things like warming and heating water when there is no electricity. Cooking gas always comes after transportation.
Then Data. Thankfully, I only have to worry about myself. So, a month or two-months plan always works for me. Same goes for my laptop. The next is bills (light bills). This is monthly, so it falls down the ranks. I can always pull it from my savings somewhere but to be safe, I can take it out and keep it tucked somewhere in a labeled envelope.
This is just me using myself as an example. You go through what you have to worry about daily and create your list. Once you do that, you will be able to prioritise one over the other according to your situation.
2. Assess your income
I have mostly been living off hive for a while so, meeting up with these quotas aren’t easy. What I do is join a contribution group where we can effortlessly raise money together for ourselves.
Another thing I do is store money away in the HBD savings in different accounts. I also make use of apps like Grey to keep my money in dollars off Hive mostly to retain its value. You don’t earn any interest doing that though. Storing naira away in dollars for me doesn’t put me at a loss when it dips - like it does. I keep this so I can access cash when I need to.
As a salary or business owner, you can make it a habit of saving money daily, weekly or monthly. Locking up money is never a bad idea. Especially when you live in a country like mine.
3. Break it down.
Now, this is the active part. You take your income and break it into percentages. No matter how small, we can always make something work by using the compound effect.
Take me for example:
10% - Tithe
50% - Household (this includes food, toiletries, bills, transportation and rent)
20% - Savings (School, other possible needs)
15% - Extracurricular (emergencies, books)
5% - Cravings (mostly sweets, biscuits)
Now, this is just an example of what spending looks like when compounded into one sheet. Sometimes, in a month I won’t eat that much sweets or biscuits (rarely) and for a while, I’ve been out of school so I channeled that to other things like food, enabling me to buy things that I would not normally buy because they exceed the budget.
As one who earns a steady income, you can take your time to go through your expenses and decide how much goes where. This would help you keep your pockets organised and save you getting stranded along the way.
4. Increase your sources of income
Not many people can handle money. Those who earn very little might find it hard to develop a budget system. This is where you find ways to earn more. Doing little tasks and earning little nairas/pennies from different sources can raise substantial money when brought together.
This is why many people have hopped on Crypto and web3. Earning from doing things as blogging, vlogging and gaming and threading is a huge motivational factor. Pages like MMO have also made it a duty to bring opportunities to individuals looking to generate more income. So, give us a follow on all platforms listed below to keep up with updates.
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I like the envelopes, I know there is a banking app, maybe Monzo, that does this and I think they call it packets.
Similar idea though. I like that!
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