MoneybyZikoko: Is Instant Gratification an Enemy?

Volume 91

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Good morning,

Most financial advice includes the same basic money management strategies: live below your means and set up emergency savings. Some go further and tell you to keep instant gratification at a minimum. These, we know, serve critical purposes — you know, a buffer for rainy days.

But in one of the stories in today’s newsletter, we have someone who does the opposite. And unlike many people, his is by design. It’s fascinating, isn’t it?

The numbers: What are his motivations? How did he get here? And how is it working out for him?

Let’s get into it..

In this letter:

#NairaLife: The Roadside Mechanic Who Just Wants to Enjoy His Money
I Was Happier When I Stopped Sending My Parents Money
Aunty M: What’s the best step for a financial turnaround?
QUIZ:How Much Money Have You Made This Year?
Where The Money At?!

#NairaLife: The Roadside Mechanic Who Just Wants to Enjoy His Money

In another life, this 41-year-old might’ve been a tailor. But he became an apprentice mechanic in 2012 and hasn’t looked back since.

He’s doing reasonably well for himself and swears by one financial principle: instant gratification.

This is his #NairaLife

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I Was Happier When I Stopped Sending My Parents Money

Daniel* grew up poor and was keen to be there for his family when he got older. But the expectations and the financial weight took a toll on him, and he made a hard decision: cutting his family off. The thing is, he’d do it again.

Why?

Ask Aunty M with Reni

Hi Reni.
I earn ₦150k per month, and I had hoped I’d be able to do so much more with it. These are my monthly staple expenses: tithe- ₦15k; Church project contribution- ₦10k; Ajo (I collected my turn in March, so I’m essentially paying off the debt) – ₦25k
I have ₦100k left. But that usually goes into birthday gifts for friends, attending work conferences and buying stuff for people. I have zero savings and zero emergency funds. What are the best steps to take for a financial turnaround? – Tolu, 21

Hi Tolu, the great thing is that you have a lot of money to work with after your staple expenses — it’s a position many are not fortunate enough to be in. What you currently need is boundaries around your finances. It is fine to give to others, to be generous and to spend to attend conferences, but when you’re not securing your future simultaneously, that gets dangerous. See how your Ajo contribution is basically a forced savings account at this point? You need to take the same approach with your savings.

Let’s start with the emergency fund. Your emergency fund should be enough to cover 3- 6 months of expenses if you (God forbid) lose your job. If you lost your job, you would have to stop everything and maybe even go into debt. Your monthly fixed expenses are around ₦50k. Six months’ worth is ₦300k. I suggest opening a separate savings account that you name “Emergency Fund” and calling your bank to set up a monthly contribution of ₦25k. So once you get paid, the ₦25k is automatically taken out of your account and paid into this account. It becomes a forced savings. In 12 months, you’ll have a fully funded emergency fund.

Your lack of savings also stems from a lack of boundaries and goals. It’s hard to save for something that doesn’t exist. Create goals around what you want to achieve: Do you want to move out and rent your place? Figure out how much rent is, divide that by 12, and start saving towards it monthly. Goals will help your money work for you and give you a sense of direction and control over your finances.

All in all, you’ve got this! You’re in a great position to make your money work for you instead of working for money. Remember to save before spending rather than spending before saving.

Xoxo,
Reni

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

QUIZ: How Much Money Have You Made This Year?

W’e’re in the second half of 2024. How are those money moves going?

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.