How to Save NGN500,000 in a year

So you want to save NGN500,000 in a year?

The ability to save money can be a tiring and frustrating thing for most people. There are many reasons that may be responsible for this. Some of these reasons could be the inability of a person to control their spending habits or it could just be a lack of available funds to save. Over the past couple of years, economies have become tighter and wages do not have as much value as they used to.

To be able to save at least NGN500,000  in a year, you will need to first and foremost, develop self-discipline and decide why you want to save. You will need to eliminate certain expenses in your day to day life and then most importantly, you must create a pattern of saving; this will require you to choose an amount to be saved along with a frequency with which this amount will be saved.

Let us look at some important ways that can help you to achieve your 500,000 a year saving goal:

• Take a decision on what you want to do with the saved amount.
• Identify and weigh your heaviest expenses.
• Prune your spending.
• Review subscriptions.
• Make use of automated savings applications.
• Save the money in a place or account that you will not touch.
• Find a method that works for you

Starting a new habit takes quite some time and a lot of effort. It may be even more difficult when it comes to money matters. Every day we wake up, there is one need or another for money. Some of them are so needy that they never seem to go away. Like house rent for instance, just when you are about to relax after paying a year’s rent, you find out it is time to start putting the next one together again. Then, besides the heavy needs for money, we have the small ones that show up like phone services, groceries, gas and so much more. So it is quite apparent that without discipline, it is almost impossible to save.

Let us look at a few ways to achieve the 500,000 a year goal more closely, one after another.

Take a decision on what you want to do with the saved amount

Purpose is a really good motivator. It is very easy to do something when you know exactly what the prize is going to be. In this case, I recommend choosing what you desire to use the 500,000 for at the end of the period. For instance, you could decide to give your home a facelift, take a small trip, make some investments or even start that small business you have been dreaming of starting for a long while. Whatever the case may be, just be sure to put that goal in mind, this serves as a motivator for the moments when it may seem difficult to continue with your goal.

Identify and weigh your heaviest expenses

We all have that heavy money drainer in our lives and it varies from person to person. For some people it could be shoes, bags and clothes, while for others it may be their kind of social life or gadgets. Whatever the drainer is, it definitely affects your ability to save as you would want to.  To be able to save 500,000 a year, you must identify that heavy expense and weigh its importance and its effect on your savings. For example, you can weigh and decide if it is necessary to spend money on an extra pair of shoes or save that amount and in turn, increase your savings. Discipline has a very important role here too. You need to ask yourself how badly you want to save 500,000 a year.

Prune your spending

Spending money is something you can hardly avoid. Every day, we find that there is always something to buy or a bill to pay. Some expenses are necessary while some are completely unnecessary. If you want to cultivate a saving habit, it is important for you to realize that you will have to change your spending habit and pattern. You will have to learn to pick more economical options for your daily needs. If you do not like to skip your meals, you can make sure to have breakfast at home and then also pack a lunch. It surely beats the cost of buying your meals from food vendors. That is just one example out of so many. Also, making a shopping list can help you spend less at the supermarket or stores.

Review subscriptions

We live in an era where most of life’s activities are carried out via the help of subscriptions. These subscriptions include cable, Netflix, music (spotify, Pandora, Amazon music etc.), gaming (PlayStation, Xbox etc.), gym memberships, Apple subscriptions, the list is endless. You will be able to save 500,000 if you review your subscriptions and find only one of the necessary subscriptions per category. For example, for music, if you are subscribed to both apple and spotify, it would be wise for you to choose the best offer that satisfies your specific needs for the fairest charge.

Make use of automated savings applications

With the coming of automated systems, it is definitely easy to avoid testing our discipline and to just set up a system where the amount to be saved can be taken from source automatically. For example, if you want to save daily and still achieve the 500,000 a year goal, it will require that you save at least NGN1,370 daily.  So you can set up a system where NGN1,370 can be deducted from your account daily. Applications such as PiggyVest, Cowrywise and Carbon offer such services.

Save the money in a place or account that you will not touch

When you save with a target and a goal, it is always better to keep these savings in a place or account where you will not go to or touch easily. You would never get your goal if you make a habit of taking out of your savings. Banks have locked savings accounts that provide these options. Another option is the local physical piggy bank.

Find a method that works for you

In order to save 500,000 a year, you need to put into consideration how your income comes. If you usually get paid daily, it would be wise to save daily. If your income comes weekly then it will be wise to put away the savings on a weekly basis and so on. Take a look at the different ways to save based on income:

Daily – NGN1,370

Weekly – NGN9,615

Monthly – NGN41,670

Quarterly – NGN125,000

Conclusion

The rest is up to you. When you put all the ways and methods into practice and you pick a suitable method, saving 500,000 can be an easy feat. It just takes mainly self-discipline and determination. The key is to focus on the end goal and the bigger picture.

Ask yourself; is your desire to save stronger than the sacrifices you are willing to make?

Frequently Asked Questions

1. How much do I need to earn to save 500,000 a year?

Usually, saving happens after basic needs have been met. If you want to save daily or weekly or monthly, you will need to pick the required saving amount for that frequency and try to work your needs, bills and expenses to exclude that amount. So basically, if you want to save 500,000 a year, you have to have at least an average daily income of NGN5,000 to NGN6,000. If you have an income less than this, it will be advisable to set a much lower goal for your savings.

2. What happens when I forget to save for some time

You will require extra effort. It will be wise to try to catch up with the initial savings plan. You can achieve this by sourcing other means of income and making more stringent decisions.