Happy Friday!
Another exciting weekend is here again. It’s time to recharge and unwind. Let’s dive into this week’s questions.
Question
I work as a civil servant in Lagos, and lately, it feels like my salary keeps shrinking. Everything is expensive, from food prices to transport fares to electricity bills. Even though I got a small salary increase in January, inflation has swallowed it up. I worry about how I will continue providing for my family without falling into debt. How can I adjust my finances to survive this economic crisis?
Answer:
The cost of living crisis in Nigeria has been intense in recent years. Despite this, there are a few actions you can take to control your finances. With discipline and the willingness to stay committed to making the right adjustments, you will be able to manage your finances better. These actions include:
- Create a realistic budget: Track your income and expenses carefully. Write down all your costs and categorise them into needs (food, rent, electricity, etc.) and wants (e.g. luxury items). Focus on the essentials first. Are there any ways to reduce spending on non-essentials?
- Shop in bulk to save money: Many staple foods (such as rice, beans, and garri) are cheaper when bought in larger quantities. Compare prices in different markets before making purchases. Prices vary significantly depending on where you shop. Look out for discounts and promotions to reduce costs.
- Reduce transportation costs: If you drive, fuel costs can be overwhelming. Consider carpooling with colleagues, and if your job allows it, you can also negotiate for some remote work days to cut down on your commuting costs.
- Increase your income: The importance of finding ways to increase your income cannot be understated. Relying solely on a salary is tough in this economy. What skills do you have that can earn you extra money? Side hustles such as tutoring, freelancing, or selling goods online can supplement your income. Look into digital skills that can open doors to remote job opportunities.
- Save & invest wisely: It can be tempting to stop saving when money is tight, but even small amounts can add up over time. Consider saving in stable currencies (such as the dollar) to protect your money from naira devaluation. If you have some savings, explore investment options that offer inflation-beating returns such stocks, Exchange Traded Funds (ETFs), etc.
The economy is tough, but by budgeting smartly, cutting unnecessary expenses, and creating additional income streams, you can stay afloat. These small and intentional changes could help you navigate these tough times.
Question
Should I go broke to fund my sibling’s lifestyle?
I am the firstborn in my family, and I recently landed a high-paying job. My younger brother, however, is unemployed and doesn’t seem motivated to find work. Every month, I send him money for rent, feeding, and even weekend outings with his friends. He keeps saying he’ll find a job soon, but it’s been over a year. I want to help my family, but I also feel like I am being taken advantage of. How do I handle this without creating tension in the family?
Answer
Supporting your family is important, but when it becomes an open-ended financial burden, it can hurt you in the long run. It is important to set boundaries to avoid financial burnout. Here are steps you can implement to handle the situation effectively:
- Set clear boundaries: Supporting your siblings shouldn’t mean funding their entire lifestyle. Decide how much you can comfortably allocate to family support each month and treat it like any other expense. If it’s not in the budget, it has to wait.
- Offer non-monetary support: Instead of giving cash, help him build skills or find job opportunities. Encourage him to take short courses or internships to gain experience and skills.
- Have an honest conversation: Sit down with him and set expectations. Let him know that your support won’t last forever. Ask him about his job search progress and set a timeline for when he should become financially independent.
- Introduce tough love: Sometimes, constantly providing financial aid keeps people from taking responsibility. Letting him struggle a little might push him to take job hunting more seriously.
It is important for you to protect your own future. If you keep funding others without saving or investing, you could end up in financial trouble yourself.
Set financial goals and stick to them; your future matters, too. Helping family is great, but it should never come at the cost of your own financial well-being. Sometimes, the best way to help someone is by letting them stand on their own two feet.
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