The Three Cardinal Rules of Saving
By: Ifeanacho Maryann
Tags: Piggyvest, Budget, Saving, Saving Money, Finance

The Three Cardinal Rules of Saving

Current events and realities go to show 2019 was in fact, a stupendous year. For me, 2019 brought a lot of lessons. These days, I think a lot about those lessons and experiences. Oddly, a lot of life-changing experiences and eureka moments I had came in the gym; one of them is saving. I remember talking with my trainer while doing deadlifts and the conversation shifted to saving and planning for the future. I was halfway into a deadlift when he told me how much he had saved in just three months. I nearly dropped the 50kg weighted EZ bar on my toes!

“How is that possible with your income?” I asked mouth agape.

One answer: Multiple streams of income.

That made sense, I thought as I picked up the bar once again; only to drop it again when he asked if I save too. You see, 2019 was a year of redemption for me. It was the year I got my first job as a writer; a job that opened the door to many other enlightening jobs. In essence, I wasn’t saving. I was still battling with budgeting so saving wasn’t a priority per se- and I told him so. Saving was going to have to wait till I figured out this budgeting madness and/or started making more money.

“There’s never going to be a perfect time for saving. It’s all about prioritization. As long as you are alive, needs, wants and expenses will come up. You just have to do it.”

The First Rule: Just do it

Nike was certainly on to something!

Just do it!

This, to me, is the first and principal rule of saving. Like Chanda Kaushik notes, saving from retirement starts from your first paycheck. The truth most of us fail to see as Hendrith Smith notes in “The Wealth Reference Guide” is that

“...The principles of wealth are true regarding large amounts and small amounts. It all begins with the smallest unit of currency...”

The Bible puts it in Luke 16:10 (GNB) that he that is faithful in small things will be faithful in large ones. To a large extent, your finance and saving culture is determined by your today. How you manage a weekly 100 dollar paycheck or a monthly paycheck of 20,000 naira foretells how you’ll manage a monthly paycheck of 10 million naira or 20,000 dollars. So don’t wait for the proverbial perfect time when you have a job that pays six figures and excess money lying around after your Maldives trip. Just do it and do it now. It doesn’t matter if it’s only one cent or five naira that you can put aside daily. It doesn’t matter if it’s only 20 dollars or 200 naira that you can put aside weekly. What matters is that you’re doing something. Like the French adage goes, “petit a petit, l’oiseau fait son nid” (little by little, the little bird makes its nest). So I finally did it. I downloaded the Piggy Vest App on Play store and started (consistently) stashing the little I could.

Second Rule: Save Purposefully

Agulanna Josemaria, my business savvy friend, once uploaded something on WhatsApp that will forever stick with me:

“Some people just save to spend...”

While this is not a bad thing in itself (because let’s face it you spend money when you invest), you have to have something substantial in mind while saving. Don’t just save for saving’s sake; it is very easy to burrow through your savings if you do so. Don’t save to spend on that pretty mink jacket you saw on your way to work. That’s a cycle that never ends. Next time, it’ll be a houndstooth jacket, Italian loafers or some other cute piece. Save with purpose. You can save towards a new house, marriage, starting a family, a much-needed vacation/baecation, a car, holiday gifts, a new smartphone or laptop (if you really need one), emergency fund, the kids’ college funds or just plain ol’ retirement. Set micro and macro saving goals and work towards them.

Third Rule: Budgeting and Self-Denial

In the book, “The Powers that Be,” David Halberstam quotes one successful writer who said he would never be a millionaire because he liked living like one too much. To borrow Mauricio Chaves Mesén words:

“Saving entails sacrifice; maybe that’s why it brings rewards. Those that always save always have. If tomorrow; you face a problem- you lose your job or your business- you know you can survive until the situation improves or you start another business, this time with firm foundations. However, those that do not save...”

You already know the implications of this. You cannot save if you don’t learn budgeting and the discipline of self-denial. Frugality is the bedrock of riches; you cannot become financially buoyant if you keep making it rain every weekend. Millennials are particularly at fault here. We all want the good life; the life we see on television. We all want a life that would make the Real Housewives of Atlanta green with well-coifed envy; a life replete with extravagant trips to the spa, pricey gym membership (that we honestly rarely use), and constant trips to exotic locations with the gang. A Business Insider article written by Hillary Hoffower calls these guys HENRYs

High Earners Not Rich Yet (HENRY).

This acronym was coined and first used in 2003 by Shawn Tully at Fortune Magazine. Almost twenty years down the line, this acronym has become the reality a lot of us contend with.

Record your expenses- keep track of how much money you spend daily, weekly, and monthly. From the little things like coffee, tips, and detergent to the larger things like groceries, gas, mortgage/rent, and bills. Classify them into three:

•Essentials (gas/fuel, groceries, bills, transport, taxes, school fees etc)

•Quasi-essentials (memberships, uber trips, etc.)

•Expendables (over-the-top tips, memberships (you know those memberships you never make use of), take out and expensive dinners)

Try to saw off the expendables. Instead of eating out or getting take out, meal plan, cook and pack a lunch to work. We understand self-care is king and pampering oneself is a must but just eat out once a month as opposed to every weekend. Try to cut down the amount you spend on the essentials and the quasi-essentials. Meal planning and meal prepping help you save a whole lot on groceries. Slay This Debt is one YouTube channel I love when it comes to grocery budgeting. Her hacks will not only teach you how to stretch money while grocery shopping but also help ensure quality while doing so. Buy groceries in bulk and prep meals around what you have. Stock up on non-perishable food like beans, powdered okpa, rice, millet, noodles, pasta, canned foods, etc; there is nothing more depressing than coming home to cadaverous carrots and plantains covered in gangrene.

Practice the 30-day rule when you are tempted to make an impulse purchase either online or in real-time. Chances are the urge to purchase that item (or make good of that phony discount vendors give) will wear off then.

This list on saving commandments is not all-encompassing. However, these three, to me, are the trinity; the most important rules anyone testing the choppy waters of saving should know.

Like what you read? There is more where that came from! Check out Encerrado: A Practical Guide to Protect Your Mental Health in the Time of Corona and Dear (Nigerian) Writer, You Will Suffer