Frugal lifestyle habits you may want to adopt

The way we have come to celebrate wealth in our society has also made our prudent friends stand out all the more. While some Nigerians feel the pressure or obligation to show off designer apparel, flashy cars and go on exotic holidays even when they can barely afford such luxuries, our prudent friends stay committed to their practices. Robert Kiyosaki, in his book, Rich Dad’s Guide To Investing, wrote that “The wealthy buy luxuries last, while the poor and middle-class tend to buy luxuries first.”

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Despite our feelings towards these people, somewhere deep down within us, I would like to think that we feel a little sliver of envy for them. No matter how much money we have, our needs and wants always seem surpass our resources. We have to juggle infinite expenses with finite income while these people not only seem to have control over their urges to spend, they have also amassed sizable nest eggs over the years. Most importantly, we envy them because they are not in debt.

There are definitely advantages to being frugal; I have at times been painted with that brush along my financial journey when circumstances called for a tightening of the belt. If you have a short term savings goal such as saving for your rent or paying for a family holiday, or perhaps if you finally realize that the mountain of debt you have accumulated will lead to an irredeemable embarrassment down the line, watching the pennies can go a long way.

You may also have realized that you are not getting any younger and it’s time to start putting together a lump sum to use to start a business or to build your own home. Regardless of your circumstance, I would recommend that you pick at least one of the habits below and imbibe them into and through the coming year. Don’t just spend whatever you save willy-nilly though, have a plan now of how much you will save and what you will do with the money.

You may also have realized that you are not getting any younger and it’s time to start putting together a lump sum to use to start a business or to build your own home. Regardless of your circumstance, I would recommend that you pick at least one of the habits below and imbibe them into and through the coming year.

Buy Fairly Used Items

There is absolutely no shame in buying fairly used goods. Many readers may have owned or still own a used car which is fairly common but would you consider owning used furniture or a used TV or mobile phone? I recently had the need to install a domestic water treatment plant. The quote I got was for close to N500,000. It felt to me as a rip off so I got creative. I went down the list of items and slashed here and there. Eventually, I logged into OLX and found some of the things I needed. They were used but still in good condition. I met with the owner and had a chance to inspect the equipment with my trusty artisan. I only paid after I was satisfied and overall, I saved roughly 50% compared to brand new. There was absolutely nothing wrong with what I bought, the gentleman who sold them was moving to another property that had a central water facility and didn’t need to move his treatment plant. He also didn’t want to completely lose his N350,000 investment in his plant which was about three years old.

I am now an OLX junkie. I check the site and app on my phone often to see what bargains are available. There are other similar services out there so there is no shortage of choice unless you have very unique tastes.

Pack A Lunch To Work

This is something I have never done just because I don’t think it’s convenient, however, when I added up how much I spend on food while at work, I stated considering how to make it convenient. You will be surprised how seemingly small amounts spent every day can add up to a lot over a year. If you spend N400 on meat pies for breakfast and then another N1300 on rice, chicken and plantain for lunch from the nearby fast food eatery, you spend N1,700 a day on food. Let round it up to N2,000 based on additional cost of transport for the errand boy, tips and the occasional snack for colleagues. That works out to N40,000 a month and N480,000 a year (Half a Million Naira).

I don’t know about you, but there are many things I could do with N480,000, even N40,000. Cutting this expense line by 75% could mean a better school for your kids or a piece of land somewhere. An additional N40,000 a month extra in your investment fund, growing at a compounded interest rate could also change your lifestyle come retirement.

To be honest, in my entire career, I haven’t seen many men packing a lunch to work consistently and those that have done so have been labelled as thrifty but these guys know what they are doing. One of my colleagues even brings his own Coke from home which costs him N90 when bought from a supermarket compared to N150 when bought at the office canteen. If you really want to make an impact in your monthly expenses, “brown bagging it” as they say in America is the way to go.

Plan Your Vacations Around Business Trips

This one doesn’t really apply if you are self-employed or if you are not a frequent business flyer. I learnt this particular tip from a friend who works in a bank. He flies abroad on business at least once a quarter and without fail, before he leaves, he arranges for the date on his return ticket to be pushed back by a couple of days, a week or two (depending on how long he wants to spend after his official duties). Essentially, his company pays for his vacation airfare while he pays for his hotel accommodation.

If you’re a family man, then you may need to make some compromises because you will travel alone more often. On the flip side, the air miles you earn from trips can be used to offset costs for family holidays.

Stash Away Small Notes Daily

Something that I’ve done consistently for the last 11 years or so is, at the end of every day when I get home from work or wherever, I take all the small notes that I have in my wallet from N100 and below and keep them in a jar. If change is going to be an issue the next day, I hold on to one or two small notes. Every now and then, depending on how plush I feel, I throw in a N1,000 note. Why do I keep small notes? Well, I don’t carry a lot of cash in the first place; I make most payments using POS terminals, however, when I do count the cash in my wallet, I count only the N1,000 notes or the N500 notes if that is the denomination I have. I don’t consider smaller denominations in my count.

What then happens is that I spend the smaller notes freely and when I’ve committed to making a small purchase and the small notes are insufficient, I have to break a bigger note thus creating more small notes and the cycle repeats itself until I go to an ATM to restock my wallet. If I have only big notes, I’m less likely to want to break a N1,000 note because I’d be depleting the money I’d counted.

This is a good savings technique for people who find it difficult to save consistently. I don’t raid the jar every month but when I do the larger notes add up to well over N5,000 while the smaller notes can double the figure on some occasions.

Enough Talk, Act Now

Our wants and needs will always rise to match or surpass our income. There are many things that you pay for today that you either don’t need or are paying too much for. Do you really need the DSTV full bouquet? How many movies did you watch last month?

Make a note of the total you spend per month on different categories such as petrol, food, recharge cards and so on. Think about ways you can cut down some of these expenses lines and where you would apply the savings you realize.