Managing your salary in January is an extreme sport. This is because the funds you are to use over the course of the month, was paid early in December and celebrations would’ve gulped a big part of it. Therefore, a lot of people enter the new year quite broke. Knowing how to manage money effectively is one thing, implementing these techniques when managing your salary is another. One of which is saving and can be done using various saving tips.

How to Manage Money Effectively

1. Create Budget

Some may say a budget is for broke people, but the truth is, a budget is for smart people. Creating a budget is a way of managing your salary. Therefore, if you do not know how to manage money effectively, a budget is a great solution. Your budget is an estimate of your income and expenditure over a period.

You can make a budget for any period such as daily, weekly, monthly, quarterly, yearly and so on. Budgets also work on goals like events, buying a car, rent, housing, etc. a budget will help you properly allocate funds to your various expenses and properly monitor your cash flow. This will ensure you are never bordering on the thin lines of broke and holding up.

2. Pay your bills

The first thing your money should go into when managing your salary is your bills. Your bills are need expenses that should not be accumulated or else, you will run into debt. While learning how to manage money effectively, you must learn to prioritise, and necessary bills are at the top of the list. When you get that December salary, before spending it all on parties and a new wardrobe, pay your bills. This is because January is by far the longest month of the year and you don’t want to be broke at the start of the year.

3. Invest

Investments take time to yield profits. Some investments take longer than others, but investment is key in managing your salary. It is not a smart move to just make any investment, as some investments can be termed ‘bad investment’. You must study the industry, seek advice, gather information in order to make the right one.

Investments are not bible in the sense that the rules remain the same, you are very much allowed to go with the tide and make other investment choices. For instance, you do not have to invest in shares your whole life, yo

u can take your money to real estate. This is how to manage your money effectively, on long term benefits.

4. Save

A little savings can never go wrong. Saving is a big part of managing your salary. Sometimes, the issue could be saving on a small income, either way, saving is still possible. Whereas some people save up to 50% of their monthly salary, other people save from their weekly allowances and a good number of people save the change left from the days’ cost. However, in managing your salary, you need to save, spend and invest.

5. Discipline yourself

Managing your salary in January takes a lot of discipline, especially in December. If you work in a commercial area, there will be a lot of temptation near by such as restaurants, boutiques, cab services, gadgets etc. This is because, you feel you have the money. Discipline is a big part of knowing how to manage your salary.

Numerous times, it is not the big spending that wrecks your account, it is the petty purchases that do the wrecking. If you skip cabs sometimes, and manage your data more, you would have a lot more money to save. Also, going out and about with friends cost money too. Therefore, the ability to discipline yourself, will help in managing your salary.

6. Pay yourself

All save, and much starvation makes you stingy to yourself. In all the means of managing your salary in January and every other month, it is important to treat yourself, or else, you will never know when you can spend your own money. Simply pay yourself a percentage of your salary. This will allow you to enjoy some luxuries and still manage your finances effectively.

Saving Tips When Managing Your Salary

• Create short term goals

Short term goals is one of the best saving tips especially when you are managing your salary. Short term goals allow you to work towards something as opposed to saving up without a definite goal. These short-term goals could include a phone, property, getting your own place, a car etc. These are items of luxury and forms of investments. Over time, you would have acquired the basic luxuries you desire and will have more money to save.

• Save automatically

Saving manually is for the strong hearted. It is easy to default on your savings, therefore saving automatically is on the list of saving tips. When managing your salary, an easier and more consistent way to save is to automate it.

A lot of banks if not all Nigerian banks has mobile apps. Some of them have a savings service which can be set to your desires. More efficient, are the legit savings applications where you have the option of autosaving a stipulated amount daily. You can also make a quick save by depositing any desired sum.

• Get a piggy bank/kolo

A piggy bank is the oldest means of saving. In Nigeria, a piggy bank is called a kolo. This is because kolo refers to a small container where money is kept. This saving method is most suitable for loose change. After a day’s or week’s expenses, all loose change is kept in this container. It may not seem like a big game changer when managing your salary, but after a few months or at the end of the year, a good amount will come out of the piggy bank.

• Unsubscribe from shopping mailing lists

One of the greatest saving tips of all time when managing your salary is to unsubscribe from shopping mailing lists. It is almost as if they receive an alert when you have money that should be saved. It is at that time; your favourite brands give unbelievable discounts on items you have been dying to buy.

 From electronics to clothing, subscribing to mailing lists keeps you informed, but will lead your finances to the grave. When the amazing deals are out of sight, they will be out of mind. In a country like Nigeria, shipping cost is enough to scare you, however, the Instagram vendors are still out to draw blood.

• Open an account with no debit card

Sometimes, having access to your savings is the problem. A good saving tip is to create a savings account and do not apply for a debit card. That debit card will motivate to input your card details when ordering online. That same debit card will allow you easily access the funds at the nearest ATM. Though, you can initiate transfers, leaving the account inactivated for internet banking, is the safest option.

• Start thrifting

Thrifting in Nigeria is another way of saying, Ajo as Yorubas would say, or Esusu, as the Igbos call it. It is simply contributions. There are different rules to it and it is mostly adopted amongst vocational entrepreneurs and market traders.

An individual can make daily or weekly contributions to be withdrawn at the end of each month, or a few months. Monthly thrifting involves a group of people, who contribute the same amount every month and is available to be withdrawn by one person in the group. This method serves long term needs of each contributor.

• Make a plan

If you have a savings plan it will be easy for you to incorporate your saving tips each time you are managing your salary. This plan will ensure consistency and even avenues to increase your savings and better your standards of living.