Christmas is fast approaching. How do I stick to my budget?

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Question

Christmas is almost here. I want to get gifts for my friends, but I have a budget and want to stick to it. How do I go about this?

Answer

First, we would like to say we are proud of you for taking the first step of drawing a budget for Christmas. You are really ready for Christmas!

Sticking to a budget might be quite difficult, especially during festive seasons when one has a lot of loved ones to give gifts to. However, that it is difficult doesn’t mean it is not possible.?

Here are tips that can help you stick to your budget:

Start shopping early: Now that you have drawn up a budget, start shopping for things on your list. If you wait till it’s close to Christmas Eve, prices would have gone up and you would have to exceed your budget or forfeit buying gifts (which we do not want to happen).?

Leverage Christmas deals: ?Obviously this is the Christmas season, and most stores will be offering great prices for products. Check out your favourite stores and take advantage of the great prices they’d be offering.?

Have alternative gift ideas: Ensure you have alternative gift ideas. For example, if you want to get your niece or nephew a PlayStation 5 and it’s exceeding your budget, you could decide to get them a premium subscription to the MoneyAfrica Kids' community. You would agree this is a good alternative! The main point is always to have alternative gift ideas, so you don’t put yourself in a tight spot!

For other readers, if you don’t currently have a budget, do not feel left out! It’s not too late to draw up your Christmas budget. Ensure you follow the tips to help you stick to your budget once you prepare your budget!

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Question

I recently got promoted at work and now earn about N700,000 a month. I used to earn N280,000 and couldn't save anything let alone invest. How do I save/ invest for the long term? I have one goal in mind: building my own home in a reputable area in Lagos. I have also started a side hustle but the income is not consistent. Let's assume I can save N400,000 a month. What would you advise?

Answer

Congratulations on your promotion! We are happy for you! We are also glad you want to take your financial journey seriously, and start saving/investing.

It is good that you have the goal to become a homeowner; however, it is important to note that it is not advisable to have just one financial goal. There are many things you need money to finance, and having more than one goal is going to ensure that you effectively plan your financial life. Some goals you should consider include investing in the education for your children, planning for retirement, etc.

Note that financial freedom is a long-term journey, and being able to save and invest requires a lot of discipline.

In order to be consistent with your savings and investment, keep your spending below your income. When you receive your paycheck, remove a percentage of your income to save, let’s say, 20%. Then adopt a 50-30-20 rule to allocate the remainder of your income: 50% goes to your needs such as rent, transportation, groceries, and insurance; 30% goes to your wants such as travel, hangouts, social events, etc.; while the remaining 20% goes to building your investments. You can invest in shares, mutual funds, real estate, etc.

Also, find ways to ensure your side hustle generates higher income. You can improve on customer service and other things to ensure you are attracting more customers.

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