MoneybyZikoko: This Single Mother Wants Out of Black Tax

Volume 90

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Good morning,

Let’s discuss Nigeria’s #NairaLife briefly. When you consider the country’s financials, one word comes to mind: debt.

According to the latest quarterly statistical bulletin from the Central Bank of Nigeria, the federal government spent about 74% of its revenue on debts in the first quarter of 2024.

The numbers: The government’s retained revenue was ₦1.76 trillion, and ₦1.31 trillion (of this money) went into offsetting the national debt.

Interestingly, while debt servicing was high relative to the government’s revenue, it only comprised 29% of total expenditures. The government’s spending in Q1 was ₦4.59 trillion, down 12.9% from last year’s ₦5.28 trillion.

This cut in spending also led to a reduced fiscal deficit
— the difference between the government’s total income and the total expenditure — dropping 29% from ₦3.96 trillion in Q1 last year to ₦2.83 trillion this year.

But it appears debt servicing trumps everything else, as the government spent more money to pay its debts than it did on personnel costs (₦1.15 trillion went into this) or capital expenditure (aso ₦1.15 trillion), down by 35.9% from ₦1.18 trillion in capital expenses in Q1 2023.

If you’d like to know more about how the country performed in Q1, download the CBN bulletin here.

Now, let’s look at today’s stories.

In this letter:

#NairaLife: The Single Mum Who Regrets Being Her Family’s Breadwinner
What’s the Real Cost of Inflation? 5 Nigerians Tell Us
Aunty M: I’m Expecting a ₦3m Windfall. I Don’t Know What to Do With It
QUIZ: How Good Are You With Money?
Where The Money At?!

The Single Mum Who Regrets Being Her Family’s Breadwinner

This 24-year-old spent the last few years working to provide for her dad and siblings, and she’s convinced the pressure contributed to her being a single mother of a two-month-old. Now, she’s focused on making something of her life, and the first step is making money.

This is her #NairaLife

Jollof+ is a cutting-edge savings app providing up to 21% net interest rate with no hidden charges. Designed to help combat inflation, Jollof+ offers personalized saving features, ensuring steady financial growth for users.

Find out more here

What’s the Real Cost of Inflation? 5 Nigerians Tell Us

Inflation in Nigeria is one thing that goes up but rarely ever comes down. At the receiving end of it are Nigerians who are struggling to navigate their businesses or their day to day expenses.

More than ever, people are trapped in a cycle of figuring out how to make enough to spend on rapidly increasing costs of things. What does this look like?

We asked a few people to paint a picture

Ask Aunty M with Reni

My Dad wants to sell my late mum’s property in Ogun State. Due to the area’s poor planning, it’s difficult to create a good drainage system, and the increasing cost of materials has made it even more challenging to keep developing what was supposed to be a block of self-cons.

When we sell and split the money between my siblings and me, I should end up with about ₦3-4m. I don’t know what to use the money for. I earn ₦150k per month, and I live with my parents. I don’t have any financial safety nets, which I’m trying and failing to fix.

I also need a new laptop and a new car. If this money wasn’t coming, I’d have kept managing the Toyota Picnic I currently use (but have always hated). I should state that it’s a pretty old car – about 12 years old.

But I currently work from home and don’t go out often. So, what do you think? Should I sell off my car, add the money, and buy a new one? Should I sort out my technology needs and save (or invest the rest of the funds)? Or should I invest all of the money? If it’s a yes to investment, what would you suggest I invest it in? – Sayo, 22

Hi Sayo, thank you for sharing this! You should allocate the 3 million naira based on your needs and wants. To me, your main financial need right now is to have a financial safety net, especially if you plan to move out to your future apartment. This can be in the form of an emergency fund. The reason I emphasize this is because you live with your parents, so everything is fine, but what if something happened to your parents (God forbid) where they couldn’t take care of your needs in an emergency? When you move out, the need for this is even higher.

Prioritise funding an emergency fund where you can save up the equivalent of 3-6 months’ worth of expenses. Since you plan to move out, estimate your monthly expenses in your new apartment and base your emergency savings on that. Having an emergency fund provides peace of mind and allows you to not take desperate actions due to lack of funds.

Second, let’s talk about your wants. Your car is functional but expensive to maintain. Can you spend a chunk of the money repairing it to a point where it won’t need regular patch-ups? A well-maintained 12-year-old car can run for a long time. If it is past the point of repair, then yes, consider buying a new one, but please buy something within your means.

Third, your desire to upgrade your device is valid. It’s all about when you upgrade it. If you have the funds to upgrade the laptop without impacting your other financial goals, go for it. The first step would be to evaluate how much the laptop costs and how much of your ₦3m you want to allocate to this.

Lastly, invest some of your money. This goes hand in hand with your financial needs. Investing the money will help you secure your future and get one step closer to financial freedom. Start by learning to invest (take a course or a class), then open your investing account and buy ETFs.

Overall, none of your desires are wrong; you just need to prioritise them based on importance and timeline.

Xoxo,
Reni

Do you have a burning money question? Reni might have the answer. Cick this link to get started

QUIZ: How Good Are You With Money?

Money management is a skill. Some people are simply better at it than others. Where do you stand?

Take the quiz to find out

Where The Money At?!

We can’t say we’re about the money and not actually help you find the money.

So we’ve compiled a list of job opportunities for you. Make sure you share this with anyone who might need it because in this community, we look out for each other.

Again, don’t mention. We gatchu.