(How to form the habit you required to save more money)
“The lasting favor you can confer to a child as a parent is helping the child to help itself”.
Advising someone to save money without exposing the process to follow in order to save that money is what I think looks like an elusive statement.
And the uppermost question in the mind of people who do not save is; “how can I do it?”
As someone who finds it difficult to save, you should know that the process of saving money is---- all about habit. For this being the reason, we are going to start this article with THE LAW OF HABIT.
According to the law of habit, it has been proven that any action or deed perform often, due to the repetition after a particular time become a routine and the brain has to be accustomed to it that, you do perform same action even when you are not told to.
Speakers proved this to be true by saying that; by mere telling a story often and on which is based on pure fiction, the mind becomes accustomed with it that you immediately forget that the story was based on fiction and finally starting to believe it is true.
WHAT TO DO AND WHAT NOT TO DO IF YOU WANT TO FORM HABIT OF SAVING:
1. DO NOT FIX YOUR MIND TO A GIVEN EARNING CAPACITY: this will make you not be able to earn more than that, because, law of habit will set up a definite limitation of the amount you can earn.
2. INCREASE YOUR EARNING POWER: set up an accurate, definite description of that which you want, including the amount of money you intend to earn. This idea will destroy the poverty consciousness and set-up a prosperity consciousness. Definitely, you will begin to demand prosperity, also be expecting it, and finally begin to prepare yourself to receive it and to use it wisely; this will help you pave the way for the development of the habit of saving.
3. MAKE USE OF LAW OF SAVING BY PROVISION: in your list of definite chief aim which you might have written down, make room for saving a definite proportion of all the money that comes your way.
Note this: as your earning increases, your saving should increase likewise.
By ever urging yourself and not fixing your mind on a given earning capacity, and by increasing your earning capacity, equally making use of provision by proportion as your earning capacity increases, you will reach the point at which you have removed all imaginary meditation from your mind and will soon be leading to the road towards financial independence.
To prove these three habit of saving principles true, let us reverse the operation of the law of habit with little illustrative story;
Using magazine publishers as an example, they could create a panic in daily business news by filling their bulletin with news about business failure of the country, despite the fact that, few businesses to be compared with many who succeeded failed. Yet, people and the country go worried about the incessant failure of businesses in the country.
The kidnapping saga then in one states in south-east of Nigeria is another example. The report of the kidnapping crime in Abia consistently, triggered the same pattern of crime in other states of the south-east then, like Anambra and Imo.
The so called “crime waves” are in a large extent the product of sensational journalism.
Debt, a fatal enemy of the savings habit
If you ask me who is the merciless master? I will tell you DEBT is. It is a fatal enemy of the savings habit.
No man can save or form the habit of saving with heavy debt hanging on his neck, poverty alone is cable to kill-off ambition, destroy self-confidence, and destroy your hope, then think of when added to it the burden of debt.
All who are victim of these two cruel masters are practically doomed to failure.
So, have it in mind that the accumulation of debt is a habit. And it starts in a small way and grows until it accumulates to subduing tendency and you will be heavily indebted.
Many young men start their marriage with heavy debt hanging on their neck, and when the eve of sweet married life continues to wear-off then what follows is dissatisfaction and often times divorce.
Avoiding slavery of debt and be able to form habit of saving;
(a) Resolve to be no man debtor by thinking of what you owe yourself and those who are dependent upon you--- this is the advice of one successful man whose early life and chances were destroyed by debt.
(b) Throw-off the habit of buying that which you did not need.
For our information, there are two classes of debt as described below:
1. Dead loss debt( debt incurred for luxuries)
2. Professional or business trading debt ( debt incurred in the course of professional or business trading which represent service that can be converted back into assets)
Note this: the first class of debt is what you should avoid. You may indulge in the second class providing the debtor uses judgment and do not go beyond the bound of your reasonable limitation.
i.e., be conscious of the type of business carrier you want to get indebted into. It should be lucrative so that you could be able to pay back in possible time.
In this article, we started from;
1. how to form the habit you required to save more money;
2. WHAT TO DO AND WHAT NOT TO DO IF YOU WANT TO FORM HABIT OF SAVING;
3. Debt, a fatal enemy of the savings habit;
4. Avoiding slavery of debt and be able to form habit of saving;
5. Two classes of debt.
I advise you take time to read and digest this and you will be on your way to forming THE HABIT OF SAVING MORE MONEY. Which is a step to financial success, he who does not save hardly get rich.
In my next article, we will be treating the linkage to this which goes like this; HOW MUCH ONE IS EXPECTED TO SAVE (is there definite amount one should save?)
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HOW MUCH ONE IS EXPECTED TO SAVE
(Is there definite amount one should save?)
Having gone through the habit of saving in my previous article, what should come to mind next is how much should one save?
And this question could not be answered in few words because; there are many conditions that determine this, some within our control and some which may not be.
But let us look at a man who works for a salary and how much he should apportion his income about as follows:-------
Living---clothes, food and shelter……….50%
Life Insurance………10% Total = 100%
However, look at the average man and his approximate distribution and what he actually makes of his income:
Living---clothes, food and shelter……….60%
Life Insurance……….5% Total=100%
Examining the line for recreation at the average man and his approximation, we should come to understand that, under this are much expenditure that do not really recreate, such as money spent for alcoholic drinks, dinner parties and other similar things which may serve to undermine health and destroy character.
Looking at the life of a relation of mine who was a banker but, loved spending more than he is paid,
This young man earns N25, 000.00 per a month from a micro-finance bank and spends more than N50, 000.00 monthly by attending to many shopping malls with his wife who also was engulfed with this habit of expenditure.
It happened that he made away with 5million naira belonging to the bank in order to meet up with his spending habit and unfortunately was caught from the act and sentenced to prison.
Fortunately for him, his relations came to his rescue and it was demanded he should pay back the money which warrants selling-off a piece of land at the price of N8m in order to bail him out.
You see! From his outrageous habit he has wasted not less than 13m naira in a bid to satisfy what he called entertainment or recreation expenditure.
BELOW IS THE SUPPOSED EXPENDITURE AS YOUR FAMILY INCREASES:
A family of two persons, with income of N100.00 monthly should budget thus;
Saving = N10.00 or N12.00
Cost of shelter or rent = N25.00 or N30.00
Clothing = N15.00 to N20.00
Recreation = N8. 00 to N10.00
A family with income of N100.00 monthly should that income be increased to N125.00 should save N20.00 of the amount.
A family of two persons, with income of N300.00 monthly should budget thus;
Saving = N55.00 or N65.00
Cost of shelter or rent = N45.00 or N60.00
Clothing = N35.00 to N45.00
Recreation and Education= N50. 00 to N75.00
Just as the salary increases, your saving budget should increase in proportion.
But instead of practicing this habit of saving, many young men have gone to the extent of purchasing cars before they pay for it.
Which have kept them at the slave trade master of debt, difficult for you to break out from because, hence you have formed the habit of buying to be deducted from your salary, it seems sweet and easy but, it leaves no one with habit of saving at last.
HERE ARE OPPORTUNITIES THAT COME TO THOSE WHO HAVE SAVED MONEY
A few years ago a young man who worked for a printing press experiences this kind of opportunity. One of his fellow workmen who formed the habit of saving N500.00 a week advised and influenced him to form same habit too.
Three years later, he was able to save a whole lot of money and the printing company he worked for got into financial difficulty and was about to fail.
He came to the rescue with his savings and in return was given a half interest in the business.
Today he is drawing out of it, as his half of the profits, a little better than N250, 000.00 per year.
Had he not form the habit of saving, this opportunity would have eluded him.
As we all know, the greatest thing in life is FREEDOM!
And there is no real freedom without a reasonable degree of financial independence.
The only escape from this lack of habit of saving which curtails freedom is to form the habit of saving money, definitely live up to it in life no matter the level of sacrifice it may require.
Millions of people go through this menace of lack of saving money including me the writer of this article, and unless you are one of the rare exceptions who listen and seek for knowledge this lesson and all that is contained here are meant for you, and you have to apply it for it to apply to you.
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