This quarter my article will focus on how you can manage better on a low income while working to improve your finances. I also hope the article will address some comments received from readers of this column resident in Nigeria.“…I love that many people are promoting financial literacy in Nigeria but something missing in the conversation is how Nigerians have external families and dependents at every stage of their lives, that makes basic saving and wealth creation such a struggle….”I have received some feedback (like the one above) suggesting that financial literacy efforts by finance coaches recommend tips on savings without considering the low income earned by many in this part of the world. My position is that “no matter the level of one’s finances, there is always room for improvement”, and this forms the basis of some of the tips I want to share. To move from one level of financial comfort to another, there must be sacrifices. It is dangerous to accept a low income as an irredeemable or permanent situation by saying “my income is insufficient and, therefore, I cannot improve my financial situation”. This article will discuss the little things that can be done to help people manage their income more prudently. Some avoidable habits can save unnecessary costs, thus freeing up more of your monthly income. There are also some habits that can be inculcated which can improve your current level of income. The Finance Coach will be sharing 12 simple tips that can be applied to better manage your “low” income.Many of those who need these tips may not have access to this article, I, therefore, urge readers to share these tips with those who need to know in your immediate circle of influence. You can share in family meetings, religious gatherings and other social events. 

1.     Take personal responsibility for your finances. Do not make yourself a liability. Acknowledge that you are personally responsible for your financial circumstances and for improving this. Irrespective of your age, no one owes you anything. We must eliminate the entitlement mentality that is so common among us. This has the tendency to make folks dependent on family members. Knowing no one owes you anything keeps you on your toes and motivates you to work harder and make better choices. Do not live your life with your eyes set on a relative’s purse or financial status. It is even unsafe to put such reliance on a relative as disappointments from such sources can negatively affect your health.

2.     Handle family pressures with wisdom. Discourage impromptu requests from family members except for unavoidable emergencies. What you tolerate grows. Let them know your finances are organised and that you work within a budget. No matter what you earn, there are people around you who believe you are more comfortable than you are or should be and so can spare some money for their use. Unfortunately, the culture of family members expecting support from the perceived more comfortable relatives will not leave soon. However, you must balance meeting such requests with your personal needs. No one gives what he does not have. There is no need to feel guilty when you cannot immediately meet the demands of less privileged family members. A good approach will be to discourage impromptu requests. If you must assist, you should consider having a budget for requests like this. This guides you and helps you manage such pressures better. Be careful to ask questions and be sure that you are supporting genuine needs. Ensure that welfare support or financial support to family members are not mere handouts but targeted at improving their capacity to earn and empower them to generate income. Be careful to identify and differentiate lazy family members from those with genuine financial burdens. 

3.     No matter what you earn, put something away as savings. Most people say “how can I save anything when my pay packet is not enough to meet my immediate needs”. The truth is if you are earning 80 per cent of your current pay, you will still find a way to survive. It is important to make some sacrifice to “power” your next level by making some form of savings. Simple budgeting ahead of your next pay goes a long way in helping you to save. Allocating funds to the different classes of bills would be helpful in identifying excesses. Learn to allocate funds to basic expenses like food, transport, utilities, entertainment, miscellaneous and see the window for possible savings. For example, you are likely to stay within planned budget for telephone costs if you have a target figure for this than if you buy your phone credit as you exhaust it. If you have a budget for your telephone bills, you will not engage in frivolous telephone conversations or mischievous forwarding of text messages and video clips. One area of possible savings for folks in Nigeria is in the area of data costs. Some might say it is not a significant cost, but every kobo counts. Many  people who struggle to save are in the category of those who spend without a plan. Savings options include the popular “Ajo/esusu”, cooperative savings and target savings schemes. Another way to save is from unexpected financial bonuses and gifts. Instead of applying all of a bonus or gift to long-standing desires, a percentage can be saved.

4.     Cut your coat according to your cloth.  I have noticed that most people come under financial pressures from expenses above their income levels. For instance, financial decisions relating to rent and child education. People are encouraged to put their wards in schools they can afford and also take apartments they can afford. This might be an uncomfortable but necessary sacrifice to move to the next level. It is also important not to follow the Joneses but to buy only what you need. There is no point buying expensive telephone sets with sophisticated facilities which you will not use. Such purchases mean you are tying down funds that can be put to better use.


5.     Get the best value for your 24 hours. My advice is that you get the best pay out of the utilization of your work hours. Try and avoid inadequate compensation for your time and labour. This means you should seek and commit to the employment that pays you the most out of your available options. For instance, if working on a building site as a daily paid labourer will earn you more money than sitting in an office as an office boy or a driver, by all means, go for it. It may also be more profitable to be a farmer than staying in the city to do lower paid office jobs. Where possible, combine two or more options to make the most of the available working hours in a day.

6.     Make more money! Seek multiple streams of income. For most people in Nigeria, one income stream is not enough; hence the recommendation to have more than one source of income. There is a better chance of coping with financial responsibilities and pressures when you earn from more than one source. Couples should both earn money for the family. Assets owned can be deployed to earn revenue. A lady in a paid employment registered her car with Uber and switches on the app on the way to work and after work. She also switches it on when free at weekends. This extra income goes a long way in meeting some of her needs, and she is able to save and improve on her current level. A young university graduate I know runs a photography/video service but also registered his personal car for Uber services. While the photography business keeps him busy at weekends, he switches on the Uber app during the week.

7.     Improve your skills, education and certification. It is important not to remain at the level of competence you were hired at. Your job is more secure, and you are a candidate for promotion if you demonstrate to your employer that you have invested in self-development. You also make yourself more marketable in the job market. Be eager to learn new skills outside your immediate area of responsibility. Make an effort to harness other skills to add to the single income stream or whatever you do. For example, do you work in a salon as a hair stylist? You can learn nail care, make-up skills in between assignments. This way, you can offer more than one service and become more valuable to your employer. Such skills are also available for you to render outside work hours. Money earned from such hard work will contribute to improving your financial status if well saved and not spent on frivolous things.

8.     Don’t accept a job if the salary won’t cover your expenses. Do not accept just any job. It gives you the false impression that you have a job and restricts your desire to get an adequately paying job. It is better to channel one’s physical energy to earn more as a laborer than be a dignified office worker in “shirt and tie” earning poorly. Recently, I was in a friend’s car and she wanted me to help counsel her driver who was constantly broke. Upon interrogation, I discovered the driver earns 35k with a wife and four children. The enormity of the financial pressures from home and the “helplessness” of his situation resulted in momentary outburst of tears. I analysed his situation and discovered his full-time job does not provide him with a reasonable pay to meet his family needs. My suggestion to people in this category is to seek temporary alternative jobs that will earn them more money, even if it is a daily paid job on a building construction site. This will earn him some respite until he can find a reasonably paid job.

9.     More than anything else, Stay healthy. Most people in the employment of private companies and individuals do not have a medical insurance cover or allowances. Consequently, in the event of illnesses, such people have to fund their medical costs. The safest way to avoid such expenses is to make the right choices to stay healthy. Eat right, exercise right and rest well. If you have been placed on regular medications to manage an ongoing ailment (diabetes, high blood pressure etc.), ensure you always have enough and do not stop these without a doctor’s approval. This may just result in being penny-wise, pound foolish.  In the event of occasional health breakdown, seek the attention of a proper doctor and not quack doctors or nurses. The cheapest medical option is to seek timely attention from government hospitals.

10.  Family planning. Gone are the days when your wealth was measured by the number of children you had. These days, even the wealthy are very careful about the number of children they have. Reasonable spacing is also important for the financial and physical well-being of the parents. It is cheaper to visit a hospital for a family planning session than to birth children that become heavy financial liabilities.

11.    Preserve your business brand. Do you own a business that renders services? You earn more when you keep your commitments, and you lose money when your clients cannot rely on you. Be conscious of delivering when you promise to and at the right quality. You are the best advert for your service or product. Once you deliver on your promise, the word is spread that you don’t fail on your commitments and people will seek you out. On the contrary, when you fail to deliver as promised, your clients also help you spread the news reducing your patronage. Everyone wants a service provider who will give good value for the money paid.

12.Understand that Time is Money.  It is often said that time is money, but money is also time. Understand that your pay at the end of a period is tied to the working hours in that period. This requires that you spend with care bearing in mind the number of work hours behind every amount spent.  A man in paid employment who earns say, #90,000:00 a month, earns about #3,000:00 a day. So if such a man, out of impulse, buys an item he does not necessarily need for #6,000, he has thrown away two days of his thirty hard working days. Unfortunately, since he is in paid employment, the wasted two days will not be reimbursed till another payday. When a man keeps this in mind all the time, when spending, he will likely be more careful not to spend his money on frivolous things. The above points are not exhaustive, and I recommend that people should seek financial advice as often as possible. There are many free services available from experts.

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