Tag Archives: money basics


Money Basics: Don’t Spend It All in December

For those of us in Lagos, Nigeria, harmattan – and Christmas – is very much in the air :-). The retailers have put on the show to draw people in and dispense the contents of their wallets, with the “mind-blowing offers,” the “you must haves,” the “must-visit places,” and the “must-do things.”  It is very easy to get caught in the commercial excitement of the moment, especially because the capacity to indulge for most is also increased during this period: bonuses, gifts, and most salaries get paid earlier this month.  For those who think the Joneses are the gold standard, it is an even more financially hectic period.

Here is a reality check for us all though: after December comes January, and 10 other months before the next December.  January is considered by many to be a long and gruelling month, primarily because the duration between the paydays in December and January is the longest in the entire year for most – an average of 37 days according to my guesstimate. It is also because December is filled with so many activities and holidays from school and work, while January is “empty” after the 1st day of the month / year.

Here is another major reason why January is so long: school fees are due at the beginning of that month! For some, rent is due as well; these two items are the largest monetary expenses for a lot of people.  In fact, for some, the financial behavior in December ruins the whole year ahead.

So, now that we have identified some of the ways financial problems are created, here are some of my proposed solutions:

  • Forget about keeping up with the Joneses! This will always be my number one advice because keeping up with the Joneses is not a sustainable basis for getting anything done in life because the truth is the Joneses are clueless and broke!


    Image courtesy freedomfromwithin.com

  • Create an income-expense plan (some people call this a budget :-)). It would interest you to know that income-expense plans have been saving lives and fortunes since the beginning of time!  No entity – individual or organisation – can have the kind of lasting progress a lot of us desire without one of these.create-a-working-budget
  • View your finances through an annual lens.  It is rather easy to focus on the cash inflows and outflows of each month on a per month basis.  The reality for most of us however is that both our cash inflows and outflows vary by the month, and this is the case regardless of whether we work for an employer (private or public) or we employ ourselves.  An annual view will help acknowledge this reality and make your income-expense plan more representative of your situation.  It will also make it a lot easier to appreciate why you cannot afford to spend it all in December.


    Image courtesy thinkbeyondthedesktop.com

  • Save and invest.  One of the outcomes of your annual income-expense plan would be the need to save and invest, as some of the current income will need to be put aside to offset an expense later next year.save-invest
  • Remember the reason for the season: giving and sharing our fortunes with those less fortunate than ourselves, i.e. philanthropy. He who gives shall receive even more.  Let us not forget those around us who could really do with a little bit of what we take for granted.  Instead of buying your child that latest electronic gadget that she does not need, you could buy the monetary equivalent in rice and give to your domestic employees, or even school bags for their kids.


    Image courtesy philanthropistlist.com

  • And lastly, self-discipline. None of the above can be achieved without a healthy dose of self-discipline. We each need to love ourselves enough to be willing to forfeit instant gratification for a greater longer-term purpose.  Just as we need to apply this to weight loss and keeping our bodies healthy, so we also need to apply this to keeping our finances healthy.


    Image courtesy quotesgram.com

Do you need the assistance of a professional with (i) creating an income-expense plan (ii) creating a savings & investment plan?  Feel free to drop me a line at comments@finomics101.com.

It truly is the season to be merry; my family and I wish you and yours the best of the season.  Wouldn’t it be better if the merriment lasted all-year-long though? 🙂


Image courtesy motorweek.org


Money Basics: Money Equations


Remember your basic mathematics?  Equals, addition and subtraction? I knew you would :-). Great! Because that is all you need to understand the basic money equations on today’s edition of MBWBB :-). Ok, you also need to understand the concepts of “less than”, “greater than”, and “%”, but I am 100% confident that you have this covered :-D.

We all hear about saving being the key to having more money; it is true!  Which brings us to our first equation:

(1) saving = not spending

It is only money that is not spent that can be saved… logical abi?  Glad that you are still with me :-).

We spend on things that we consider to be necessary and things that we like; each person’s list of necessary things and “I like” things would vary considerably, as it should be.  So, in order for a person to be able to save / not spend their money, our second equation must hold true:

(2) money made > money spent

This means that you have to receive more money than you spend; same thing flipped around means that you have to spend less money than you receive.  So, in order to save money, you would need to either make enough money to cover all that you would like to spend and save, or adjust your spending to fit within the amount of money you receive and have enough leftover to spend.  This leads to our third equation:

(3) money received = money spent + money saved

Are you still with me? Great 🙂 !

We would all love to be able to receive enough money to cover all that we would like to spend and still save; if only wishes were horses :-).  In the real world, that is one wish that very rarely comes true, sigh.  So, for most of us, we are usually working with the constraint that is the amount of money we receive, and we have to somehow find a way to fit in our spend and save requirements and still be happy!  We can work hard and increase the amount of money we receive by getting  a promotion or working  a side gig, but the percentage of people who have so much money that they do not know what to do with it would likely remain at the low end.

So what should we the majority do?  Accept this and work with it :-).  It is usually useful if a conscious effort is made to save, and our fourth and fifth equations should help:

(4) money spent = 70% of money received

(5) money saved = 30% of money received

This means that we should strive to spend at most 70% of whatever money we receive, whether it is N1,000 or N1,000,000, and the rest should be saved.  Did you say this will require making choices?  Absolutely!  There would be choices about whether to buy that aso-ebi or continue that expensive gym membership.  This is what being frugal is all about, and – as you must have observed – most of the genuinely financially successful people are also the most frugal.

I believe in the power of helping others and giving back.  The holy books encourage us to give of ourselves and our belongings to those who are in need and could benefit.  Consequently, I usually recommend adjusting equations (4) and (5) above to:


Source: freeimages.com

(6) money spent = 65% of money received

(7) money saved = 25% of money received

(8) money used for charity = 10% of money received


You still here with me?  Yay!!!  😀

That’s enough equations for today 🙂

How do you go about implementing the recommended equations you ask?  Those will be covered in future posts – the next set of which would cover basic money concepts that would help put the commonly used terms in perspective.

I am looking forward to your comments and questions :-).


Introducing Money Basics

Most of the news channels, beer parlours, and pepper soup joints in Nigeria are abuzz with gist about falling crude oil prices and the recent formal devaluation of the Naira.  The real questions on the minds of most people, however, revolve around their specific individual scenarios and how to save themselves from financial destruction.  In order to be able to answer these questions, and generally calm down the heart palpitations some of us experience when we start thinking about our personal financial situations, we need to properly understand the following about money:

  • what it actually is;
  • how to track it;
  • how it can be made;
  • how it can be saved;
  • how it can be made to work;
  • how to avoid being a slave to it;
  • how to avoid losing it;
  • etc.

This is where Money Basics with Bash B, acronym MBwBB :-), comes in.  There will not be information on how to double money overnight – if I knew that secret, I would have since bought an island :-D; what would be availed is information that will facilitate optimal money-related decisions, i.e. would maximise how much money comes into your pocket and minimise how much money leaves your pocket – this is what we all want, no :-)?  There would be links to useful established resources.  MBwBB would also attempt to respond to specific enquiries that would increase everyone’s knowledge base, and you know what they say about knowledge? KNOWLEDGE IS POWER!

So, I look forward to reading from you as we learn and share.  If you would prefer to send a private message to keep things confidential, you can send an email to comments@finomics101.com.