By Genevieve Aningo
One of the norms in Nigeria is inflation, it’s the harsh reality that should make everyone begin to adjust their financial decisions to live above or manage the effects.
While the inflation index for the month of July is yet to be published, according to the National Bureau of Statistics (NBS), Nigeria’s inflation for the month of June surged to 18.6%, the highest level in 65 months (over 5 years). This highlights the luring dooming economic, if not domed already, state of the nation. With the exchange rate of 1 US dollar at N710 in black market as of Thursday last week, the import-dependent country has become an expensive place to live in.
Inflation simply means an increase in prices of goods and services while the currency depreciates. In Nigeria’s economy, inflation has become a barrier to amass wealth and transcend into a higher economic class or strata. What happens is that individuals strive to maintain their economic level because even if they have additional monetary input inflation snatches it as they spend huge sums on basic necessities.
According to Statista, Nigeria is the 7th nation with the highest inflation rate in 2022 with 16.1% and the World Bank revealed that between 2000 and 2019 Nigeria inflation stood at 866.50% compared to the Sub-saharan African (SSA) rate of 189.10%.
Business analysts, however, have proffered that to survive in a time when Africa’s Inflation has been projected to increase by 12.2% in 2022, one must have savings that would yield at least 12% cumulative interest every year.
Amid the deteriorating economy and ongoing inflation, The News Diet brings you some smart tips to help you survive inflation in Nigeria:
Seek Investments Rather Than Savings
Saving in the bank is not profitable due to inflation, saving strips the value of your sum in the bank and no Nigerian bank gives upto 10% interest on savings. This is time to explore fintech Investment packages such as Piggyvest, Cowrywise, Kolopay, Opay etc. These fintech companies offer different interest up to a minimum of 5% to 13% per annum depending on the investment package. With as little as N10,000 you can start an investment plan with some fintechs.
Build Multiple Streams Of Income
This may be a cliché but it is the reality. One must create multiple streams of income, at least two in this ravaging Nigerian economy. Even if it’s something basic that earns you an additional sum of N50,000 per month. The amount can help offset some routine expenses; making you save more from your main source of income.
Aside being an entrepreneur, one can be smart and open deals with industry-related investments in agriculture and real estate. The drill is for you to give a sum and the company uses it to fund farmers and real estate businesses. In return, you would get high-yielding profits on your investments depending on how much you invested. ThriveAgric, Risevest, Crowdyvest are some options to create extra streams of income through investments.
Learn To Budget
To cope in this financial precarious times, you must know how you spend your money. Gone are the days of careless spending. Spending should be intentional and not because you fancy what you see. Know how much you bring in monthly, how much is to be kept aside and how much is for spending, investing, etc. Perhaps, proper budgeting could be used as a sword to win the ongoing inflation war.
Choose Needs Over Wants
A wise person knows that needs must come before wants. Since you’re a wise person who intends to stay above the hardship in the nation, you shouldn’t encourage the liberty to splurge on your wants anymore. Your priority should be placed on your needs at all times. It is time to curb your expenses on soft drinks, sweets and cookies because you can survive without them. There are also health benefits when you stay away from these items also.
Hold Savings In Foreign Currency
The type of saving that should be encouraged at the moment is saving in Dollar, Euro, Pound, Swiss Francs and other foreign currencies not prone to devaluation compared to Naira.
These currencies of developed economies help you fortify your savings from depreciation and either maintain its value or boost it. Bear in mind that running a domiciliary account in Nigeria comes with greater demands in terms of service charge and even opening the account is cumbersome.
‘Do It Yourself’ Lifestyle
No -brainer services like washing your hair, cooking a weekend treat for yourself, stitching torn clothes, house sanitation, mini-house party celebration as well as the daunting task of painting a house can be done by you.
These are soft skills an individual should possess to curtail cost and also boost fulfillment. Make a gym in your home rather than outsourcing a gym house. You can create a weekend eat out in your space with a homemade meal than carting off your money to the restaurant every weekend.
Reuse And Recycle
The worn out sofas can be revamped to a new one rather than buying new ones, the condemned or leaky plastic containers can be used to grow vegetables around the home and your vehicle tyres stacked in the garage can be given to a furniture maker to make a fancy table centre. Instead of abandoning an old car, sell it off! It is vain to wait to slim down and fit into those undersized garments resting in your wardrobe when you can make a sum by selling them off on thrift platforms.
These strategies help you spend less and reuse things in different ways; thus saving money which could have been incurred from new purchases.
Explore Digital Currency
Experiment with virtual or digital currencies such as cryptocurrencies; Bitcoins, Ethereum, Ripple, Stablecoins etc.
If you are risk averse and skillful in this area. Wise digital trading with less risk abrasiveness should be the watchdog. However, as an unregulated industry in Nigeria, digital currency has no legal backings to protect you in case of financial loss.
Engage In Bulk Purchase
It is an economic principle that the retail buyers pay the most with regards prices of goods due to their little purchasing power. This buttresses the saying ‘penny wise, pound foolish’. To save more money, please buy in bulk and if possible team with a group of friends or families to buy in wholesales. Also if you can visit local markets or depots of any items of your choice, please do. You make more bargains unlike at the streets or neighborhood markets.
Buy Locally Made Products
Due to the wide difference in the exchange between dollars and naira, you spend more when you buy imported products and brands. Please kill your taste buds for foreign items and groom it to appreciate domestic produced items.
Fashion apparels, cosmetics items, mundane household items can be substituted with their local versions rather than spending hugely for basic things.
