The Holy Act of Saving: Pay Yourself First - A Step to Financial Emancipation
Posted: November 18th, 2023, 6:53 am
Today, Aza Hub regards Saving as a critical step in your journey to financial mastery and emancipation from any and all forms of financial slavery. How can we all commit to this holy act of saving? As much as saving is a must, most people still find it difficult, for reasons obvious. Today, Aza Hub will demystify the saving culture, the bottlenecks, the working strategies, the gains. and how to do it properly.
We all work hard to make money. Then when the money comes and we get paid, be it salary or payments for job done in a project, that money needs to be applied to:
1. Your needs (limited number of life necessities)
2. Your wants (unlimited number of desires, but not life needs)
3. Obligations (necessary responsibilities like loan repayments, etc)
4. Savings (keeping some part for raining days, investments etc)
HARDER NOW, THAN EVER
Considering the current trends in the economy, it has now become more difficult to save than ever. In our nation for example, inflation rate at record highs, fuel subsidy removal, currency devaluation, and many other factors have reduced the purchasing power of our money. Hence, for the most people, their money is not even enough to cater to needs, lest talking of saving. Yet, it must be comforting to hear when we at Aza Hub say there is still a way!
Question is: How do you apportion the money made into these categories in a way that shows you are in full charge of your financial life? How do you decide what goes into what in a way that you secures your future?
SAVING - A WEAPON TO FIGHT FOR YOUR FINANCIAL EMANCIPATION, FREEDOM
I must reveal at this point, and I will continue to reveal as we proceed in this journey together on this Hub that my passion for this community advocacy for financial literacy stemmed from personal experience in the past after seeing that many people, if only they had the right knowledge and awareness, would actually decide better and make their life more successful. Therefore, till I take my last breath, I will continue to advocate for financial literacy as one major tool to freedom from:
1. Oppressive human regimes
2. Salary slavery (make-it-and-spend-it-cycle)
3. Personal unbreakable debt cage
4. Bondage of money-gulping addictions - like gambling, drugs
5. Being poor
6. And many more, as shall be revealed in upcoming topics.
The above are what you must contend with, it's a serious battle. Hence you need the right weapons in your arsenal. Saving is one of them. Every fight for freedom takes a lot of struggles and sacrifices.
Now, lets continue to talk about Savings. And here are the rules you must follow if you must save at all.
A WORKING SAVING STRATEGY
When you earn money, the amount you set aside in savings is the part you have used to pay yourself first. yes, this part, you may decide to put in some investments along the line, but failure to commit to this act of paying yourself first is injustice to your self and it is an endangerment of your future and family. So it is a must to pay yourself first.
SAVE FIRST, THEN SPEND THE REST
To understand this, we must understand that any attempt to spend first and save the rest is a trap and anyone doing that rarely save. Why? human needs plus wants are unlimited, insatiable. So, serious discipline is needed here. You must cultivate the discipline of taking out at least 10% of your income and saving it first before you start spending.
BOTTLENECKS PREVENTING SAVING
There are few factors that make savings very difficult and they are:
1. Lack of Discipline
When someone lacks personal discipline and willpower to make resolution like mandatory savings and follow through no matter how difficult it becomes, then there is a problem. Toa actually succeed at financial mastery, self-discipline is a must. You must embrace self control and focus. You must be in charge of your decisions and impulses. You must be in charge of your decisions and won the consequences. You must see the future benefits of saving beyond the instant gratification of spending spree. In fact, some people have proper budget done, but lack of discipline will make them not follow their own budget. Funny, right?
2. Excessive Debts
Because of some past unhealthy lifestyles, or truly possibly some past life circumstances for which one cannot be blamed, for example business failure, fraud, health expenses, judgements, some people are immersed in so much monthly repayment obligations that even their incomes cannot cover for the obligations, talk less of meeting their needs or even saving! This creates a very difficult
impossible situation for savings. Still, there is a way out.
3. Faulty financial goals
Peer pressure, keeping up with the Johnesses lifestyle, wrong priorities, accumulation of liabilities instead of assets all impede one's success at saving. Many may need to do an overall financial life ovahaul in order to get saving right.
4. Wrong Belief System, Lack of Proper Knowledge
Because of lack of proper financial and reality knowledge of how money works, some people hold on to the believe that the future will sort itself. Even when the Bible says Do Not Be Anxious, it is not saying Do Not Be Wise.
There is a difference between being Anxious and being wise in decisions. An anxious mind is worried to death about tomorrow and may not sleep, just thinking and worrying about how to survive tomorrow. Yet, a wise mind will not eat with all ten fingers! Got the difference? A word is enough for the wise.
5. Yes, Lack of Budget
I always see budget as the building plan, or journey map. If you proceed with a building without plan or a journey to an unpredictable destination without proper directional guide and presented by a map, then you are risking chaos. Budget puts you right in the driver's seat of your financial life journey. It puts you in charge of every penny. Will you forsake such power? Never!
Ensure you draw a monthly budget and stick with it!
6. Other reasons.
But low income is NOT ONE OF THEM. no matter what you earn, you can still save, trust me. And I will show you.
COMMITTING TO THE HOLY ACT OF SAVING
I call it a holy act because this singular act will not only save you in the future, but will also save your generations to come, especially when the saved money is applied to the right investments. We will look into investing in other posts.
So, how do you commit to this holy act of saving at least 10% of your income? Aza Hub recommends the following real-life, non-cliched but practical strategies:
PRACTICAL STEPS TO ENSURE SAVINGS
Step 1. Zero your mind!
Earlier, we identified reasons why saving may be difficult. But trust me at this point, NOTHING IS IMPOSSIBLE FOR THE WILLING MIND! Believe you can and you're halfway there. Where there is will, there is a way! How do those sound? They show that the successful saving journey starts from your mind. Make your mind up! Be determined. Be willing. You won't die if you do it, no matter how difficult.
So, to save, you must be willing, committed, determined, to save. Make up your mind, as if it is a matter of life and death! Let it be life and life! I mean, say to yourself: It's inevitable.
Step 2. Clarify and choose a purpose for it
I need to tell you dear reader, that purpose is very important in anything we do in life.
Like Spartacus said in The War Of The Damned:
i. Emergency savings - raining day rescue. Would you rather be left begging on the street or homeless when unforeseen situations happen? Could be health emergency, job loss, business failure, fraud, natural disaster etc.
ii. Future critical project - would you love to be a tenant forever, or would you crave the comfort of ownership of your own home? Your choice.
iii. Investment - Investing your saved money will make money work for you and earn even bigger money and emancipate you or your generation from any current financial bondage.
iv. Financial security and comfort - even if you dont have a huge project ahead, the feeling that you have something put away will serve as security and ensure rest of mind, so that you can spend time on more life useful things you love.
v. Limits or eradicates debts - good saving habit will not only afford you financial strength to put a stop to many money-gobbling debt responsibilities, it also ensure you budget well and cut costs, overall financial smartness.
vi. Preparation for retirement - in the long haul, your savings will assure you of good life when you can no longer work. Good retirement.
Step 3. Do it first!
Seriously, no matter how well you got your mind made up, if you fail this second step, you run a high risk of failing totally, for one single reason: the obligations, needs and wants that will swallow the money are uncountable!!!
Have you noticed that some people will come ask you for help just around the time you just got money? Is it a spirit? Well, that's the fun part that makes step 2 a critical step:
How to do it first
There are measures to take. it even gets easier for people on payrol. Automate it to your salary date.
That is why I love savings packages by companies like Mutual Benefit Life Assurance LTD. They will auto-debit your account on salary date and help you keep it. Seek automation measures if you are on salary.
How about those whose payday cannot be determined or automated? Self-discipline is key here. Contractors can get paid anytime. Payments for services can be made anytime. But with right mindset and discipline with proper budgeting, you can do it.
But do it FIRST, immediately after getting paid.
Step 4. Budget, budget, budget
Use a well planned budget to draw up in advance where you want you money to go is what I will liken to personal empowerment. How does it feel to be on the driver's seat of your financial life and future? That power belongs to you and no one else. So why renege it to uncertainty? That is a disservice to self.
Take charge! Your budget well written in advance will guide your spending. Period.
We will go deeper into the Holy Act of Budgeting in another article.
The 3 strategies above should be enough, but experience shows that there are some other strategies that will make the above active strategies easier, and at least also mitigate against the bottlenecks of saving. And these other factors are:
Step 5. Cut your cloth according to size of available material
Yes, stop living above your means, cut your spending, cut your costs, avoid living above your means.
Cut unnecessary spendings on liabilities and wants. Concentrate on necessities and needs. A new phone while the one you have still works is not a necessity. Upgrading your Benz to latest model is good but not a necessity. Moving to 5 bedroom flat from 2-bedroom may not be the most important step now. Got it?
Step 6. Keep good record
Don't just rely on memory, our brains fail us at times. Keep record on paper or notes. Coupled with proper budgeting, keeping good record will save a life. Budgeting needs accurate data to plan with. But if you fail to keep proper record, your decisions will be faulty and this will lead to financial discomfort.
For example, while budgeting for next month, you forget that your son just started extra lesson as he prepares for WAEC. Now, you apportion all income and spend all and saved too. Now you just remember you need to pay for his extra lesson. And it is a must. Well, only you can determine how that will end.
Keep good record.
Conclusion
One thing that readers on Aza hub must realise is that our articles are not cliched, but are drawn from practical scenarios. There are lots of advicce out there about saving but they end up using the same old industry cliched terms and words. But Aza hub wants to solve real life problems so we must use terms that can be understood, illustration that drive the point home for a local man.
The importance of saving cannot be overemphasized, I can personally bear witness to that. This is what we mean when we say:
Start saving today. Simple.
A LAST POINT TO NOTE
While saving remains a critical step and weapon towards your financial emancipation, I must point out that where and how you keep the saved money also matters. Interest-yielding? How much interest? How safe? How liquid? Are you investing part or all of it? Make money work for you? What types of investments?
All these questions and more will be addressed in subsequent article on Investment for the Layman: Let your Money Work Too! Follow me.
Gratefully yours
Jared
Aza Hub.
We all work hard to make money. Then when the money comes and we get paid, be it salary or payments for job done in a project, that money needs to be applied to:
1. Your needs (limited number of life necessities)
2. Your wants (unlimited number of desires, but not life needs)
3. Obligations (necessary responsibilities like loan repayments, etc)
4. Savings (keeping some part for raining days, investments etc)
Considering the current trends in the economy, it has now become more difficult to save than ever. In our nation for example, inflation rate at record highs, fuel subsidy removal, currency devaluation, and many other factors have reduced the purchasing power of our money. Hence, for the most people, their money is not even enough to cater to needs, lest talking of saving. Yet, it must be comforting to hear when we at Aza Hub say there is still a way!
Question is: How do you apportion the money made into these categories in a way that shows you are in full charge of your financial life? How do you decide what goes into what in a way that you secures your future?
SAVING - A WEAPON TO FIGHT FOR YOUR FINANCIAL EMANCIPATION, FREEDOM
I must reveal at this point, and I will continue to reveal as we proceed in this journey together on this Hub that my passion for this community advocacy for financial literacy stemmed from personal experience in the past after seeing that many people, if only they had the right knowledge and awareness, would actually decide better and make their life more successful. Therefore, till I take my last breath, I will continue to advocate for financial literacy as one major tool to freedom from:
1. Oppressive human regimes
2. Salary slavery (make-it-and-spend-it-cycle)
3. Personal unbreakable debt cage
4. Bondage of money-gulping addictions - like gambling, drugs
5. Being poor
6. And many more, as shall be revealed in upcoming topics.
The above are what you must contend with, it's a serious battle. Hence you need the right weapons in your arsenal. Saving is one of them. Every fight for freedom takes a lot of struggles and sacrifices.
Now, lets continue to talk about Savings. And here are the rules you must follow if you must save at all.
A WORKING SAVING STRATEGY
Pay thyself first.
PAY YOURSELF FIRSTSave first and then spend the rest, but not the other way round.
When you earn money, the amount you set aside in savings is the part you have used to pay yourself first. yes, this part, you may decide to put in some investments along the line, but failure to commit to this act of paying yourself first is injustice to your self and it is an endangerment of your future and family. So it is a must to pay yourself first.
SAVE FIRST, THEN SPEND THE REST
To understand this, we must understand that any attempt to spend first and save the rest is a trap and anyone doing that rarely save. Why? human needs plus wants are unlimited, insatiable. So, serious discipline is needed here. You must cultivate the discipline of taking out at least 10% of your income and saving it first before you start spending.
BOTTLENECKS PREVENTING SAVING
There are few factors that make savings very difficult and they are:
1. Lack of Discipline
When someone lacks personal discipline and willpower to make resolution like mandatory savings and follow through no matter how difficult it becomes, then there is a problem. Toa actually succeed at financial mastery, self-discipline is a must. You must embrace self control and focus. You must be in charge of your decisions and impulses. You must be in charge of your decisions and won the consequences. You must see the future benefits of saving beyond the instant gratification of spending spree. In fact, some people have proper budget done, but lack of discipline will make them not follow their own budget. Funny, right?
2. Excessive Debts
Because of some past unhealthy lifestyles, or truly possibly some past life circumstances for which one cannot be blamed, for example business failure, fraud, health expenses, judgements, some people are immersed in so much monthly repayment obligations that even their incomes cannot cover for the obligations, talk less of meeting their needs or even saving! This creates a very difficult
impossible situation for savings. Still, there is a way out.
3. Faulty financial goals
Peer pressure, keeping up with the Johnesses lifestyle, wrong priorities, accumulation of liabilities instead of assets all impede one's success at saving. Many may need to do an overall financial life ovahaul in order to get saving right.
4. Wrong Belief System, Lack of Proper Knowledge
Because of lack of proper financial and reality knowledge of how money works, some people hold on to the believe that the future will sort itself. Even when the Bible says Do Not Be Anxious, it is not saying Do Not Be Wise.
There is a difference between being Anxious and being wise in decisions. An anxious mind is worried to death about tomorrow and may not sleep, just thinking and worrying about how to survive tomorrow. Yet, a wise mind will not eat with all ten fingers! Got the difference? A word is enough for the wise.
5. Yes, Lack of Budget
I always see budget as the building plan, or journey map. If you proceed with a building without plan or a journey to an unpredictable destination without proper directional guide and presented by a map, then you are risking chaos. Budget puts you right in the driver's seat of your financial life journey. It puts you in charge of every penny. Will you forsake such power? Never!
Ensure you draw a monthly budget and stick with it!
6. Other reasons.
But low income is NOT ONE OF THEM. no matter what you earn, you can still save, trust me. And I will show you.
COMMITTING TO THE HOLY ACT OF SAVING
I call it a holy act because this singular act will not only save you in the future, but will also save your generations to come, especially when the saved money is applied to the right investments. We will look into investing in other posts.
So, how do you commit to this holy act of saving at least 10% of your income? Aza Hub recommends the following real-life, non-cliched but practical strategies:
PRACTICAL STEPS TO ENSURE SAVINGS
Step 1. Zero your mind!
Earlier, we identified reasons why saving may be difficult. But trust me at this point, NOTHING IS IMPOSSIBLE FOR THE WILLING MIND! Believe you can and you're halfway there. Where there is will, there is a way! How do those sound? They show that the successful saving journey starts from your mind. Make your mind up! Be determined. Be willing. You won't die if you do it, no matter how difficult.
So, to save, you must be willing, committed, determined, to save. Make up your mind, as if it is a matter of life and death! Let it be life and life! I mean, say to yourself: It's inevitable.
With that mindset, the rest becomes easy.Minimum of 10% - a MUST!
Step 2. Clarify and choose a purpose for it
I need to tell you dear reader, that purpose is very important in anything we do in life.
With the right purpose, overcoming challenges will be easier.More important than what is why!
Like Spartacus said in The War Of The Damned:
The purpose of saving is strong enough to make anyone commit to it without question. These purposes include, but are not limited to:A man is never too tired or wounded to fight if the cause is greater than his own life.
i. Emergency savings - raining day rescue. Would you rather be left begging on the street or homeless when unforeseen situations happen? Could be health emergency, job loss, business failure, fraud, natural disaster etc.
ii. Future critical project - would you love to be a tenant forever, or would you crave the comfort of ownership of your own home? Your choice.
iii. Investment - Investing your saved money will make money work for you and earn even bigger money and emancipate you or your generation from any current financial bondage.
iv. Financial security and comfort - even if you dont have a huge project ahead, the feeling that you have something put away will serve as security and ensure rest of mind, so that you can spend time on more life useful things you love.
v. Limits or eradicates debts - good saving habit will not only afford you financial strength to put a stop to many money-gobbling debt responsibilities, it also ensure you budget well and cut costs, overall financial smartness.
vi. Preparation for retirement - in the long haul, your savings will assure you of good life when you can no longer work. Good retirement.
Step 3. Do it first!
Seriously, no matter how well you got your mind made up, if you fail this second step, you run a high risk of failing totally, for one single reason: the obligations, needs and wants that will swallow the money are uncountable!!!
- Save first!
Do it first, even before touching the rest of the money. If you fail at doing this, you likely fail altogether.Pay yourself first. Save first and then spend the rest.
How to do it first
There are measures to take. it even gets easier for people on payrol. Automate it to your salary date.
That is why I love savings packages by companies like Mutual Benefit Life Assurance LTD. They will auto-debit your account on salary date and help you keep it. Seek automation measures if you are on salary.
How about those whose payday cannot be determined or automated? Self-discipline is key here. Contractors can get paid anytime. Payments for services can be made anytime. But with right mindset and discipline with proper budgeting, you can do it.
But do it FIRST, immediately after getting paid.
Step 4. Budget, budget, budget
Use a well planned budget to draw up in advance where you want you money to go is what I will liken to personal empowerment. How does it feel to be on the driver's seat of your financial life and future? That power belongs to you and no one else. So why renege it to uncertainty? That is a disservice to self.
Take charge! Your budget well written in advance will guide your spending. Period.
We will go deeper into the Holy Act of Budgeting in another article.
The 3 strategies above should be enough, but experience shows that there are some other strategies that will make the above active strategies easier, and at least also mitigate against the bottlenecks of saving. And these other factors are:
Step 5. Cut your cloth according to size of available material
Yes, stop living above your means, cut your spending, cut your costs, avoid living above your means.
Cut unnecessary spendings on liabilities and wants. Concentrate on necessities and needs. A new phone while the one you have still works is not a necessity. Upgrading your Benz to latest model is good but not a necessity. Moving to 5 bedroom flat from 2-bedroom may not be the most important step now. Got it?
Step 6. Keep good record
Don't just rely on memory, our brains fail us at times. Keep record on paper or notes. Coupled with proper budgeting, keeping good record will save a life. Budgeting needs accurate data to plan with. But if you fail to keep proper record, your decisions will be faulty and this will lead to financial discomfort.
Keep good record.
Conclusion
One thing that readers on Aza hub must realise is that our articles are not cliched, but are drawn from practical scenarios. There are lots of advicce out there about saving but they end up using the same old industry cliched terms and words. But Aza hub wants to solve real life problems so we must use terms that can be understood, illustration that drive the point home for a local man.
The importance of saving cannot be overemphasized, I can personally bear witness to that. This is what we mean when we say:
Do not be anxious about the future, yet be wise about the future. It is an act of wisdom to keep something aside for future reasons.Do not eat with all 10 fingers.
Start saving today. Simple.
A LAST POINT TO NOTE
While saving remains a critical step and weapon towards your financial emancipation, I must point out that where and how you keep the saved money also matters. Interest-yielding? How much interest? How safe? How liquid? Are you investing part or all of it? Make money work for you? What types of investments?
All these questions and more will be addressed in subsequent article on Investment for the Layman: Let your Money Work Too! Follow me.
Gratefully yours
Jared
Aza Hub.
