Saving from your meagre salary


Savings and investments complement each other, as investments cannot exist without savings. Many people understand the role of savings in securing a better future, but some salary earners erroneously believe that it is impossible to save from a meagre salary. However, experts note that no matter how little an individual earns, there is always room for savings, which in turn paves the way for investments.

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When a salary earner makes it a point of duty to save, no matter how small the salary is, he or she provides the foundation for self employment in the future, which in turn helps to reduce the high unemployment rate in the country. Recent statistics from the National Bureau of Statistics reveal that the unemployment rate in Nigeria has risen to 9.9 per cent in the third quarter of 2015, up from 8.2 per cent in the second quarter of the same year.


The key to financial discipline is living within one’s means. An investment expert, Mr. Ayodeji Ebo, confirms that there can be no investments if there are no savings.

“There is always an opportunity to save no matter how small your income is. It is good to cultivate the habit of saving because part of what guarantees the future is what you’re able to invest. More so, the youth should avoid living above their income because this prevents them from saving,” he advises.

In a recent seminar organised by the Nigerian Stock Exchange for the youth, financial expert, Ms. Nimi Akinkugbe, gave an insight on how one could manage expenses and save for the future. She says the best way to save is to set goals and put a plan on it. This means you need to ascertain what you want and how you want to achieve it.

“It is important to review your financial situation as this helps you differentiate between needs and wants. Needs may include school fees, transport, utilities, rents and groceries, while wants may include eating out every day, buying expensive clothes and cars and going on holidays,” she adds.

She points out that it is important to always create a budget, listing items in the order of preference and sticking to it. This will help to prioritise needs.

“Budgeting tips can include tithes and offerings; pay yourself first, automate savings, be in control of your debts, plan ahead for major spending and shop with a list,” she notes. Akinkugbe, however, warns of the risks involved with borrowing for irrelevant things. “Do not borrow for jewellery or holidays. Always pay cash for them. You can borrow to upgrade yourself in terms of developing your skills. It is good to invest in your career and talents but remember; the more you owe, the more vulnerable you are,” she warns.

“Youths have the advantage of time to build assets so they should make savings and investments a way of life. They must always have a financial plan, which must always include: planning, saving, investing and giving. It is good to build philanthropy which can be in the form of rendering your time, and not necessarily money,” she explains.


Identifying the risk factors in your area of investment is very important. “Try not to put all your eggs in one basket and ensure to diversify across sectors. Make savings and investment a way of life regardless of your income level. Debt is a dream killer so learn to differentiate between good and bad debts,” she says.


• Learn to differentiate between good and bad debts

• Do not borrow for irrelevant things

• Create a budget, list items in the order of preference and stick to it.

• Live within your means.