Seated in my office yesterday, I was thinking of how different things would have been if I had not made the grave mistake I made In handling my savings after college. Now that I think of it, it wasn’t so bad, but it hurt a bit knowing things could have been much different.
College was a rollercoaster. I had a lot of ups and downs in my finances, and the main reason was because I was trying to save money for the future
Saving through college years
In my first year, I had just opened a bank account where I received monthly stipends from my mom to take care of myself. I schooled at the University of Lagos, Nigeria, a place where you just have to find a hustle if you’re not from a very rich home.
I had coursemates who were into various businesses and making it big already.
My passion for writing fiction drove me into starting a book blog with absolutely no idea of what it all entailed. Surprisingly, I floated this blog for more than 3 years but never made any income.
The only money I ever received throughout the period was from my mom who was working so hard to take care of four grown-ups, and I knew I had to start saving some of this money so I don’t become a burden.
At the end of my second year in college, I had saved about thirty thousand naira (N30,000)
In my third year, I finally decided to go into fashion illustration (I had already been drawing designs for almost a decade). It was very hard to make anything out of fashion illustration as a beginner. Any money I got from a job, I threw into savings. I never took a dime from it.
We also had our compulsory internship at the end of our penultimate year. I worked with a popular food manufacturing company where I received a monthly salary of N20,000, most of which went straight into my savings.
I was denying myself of so much enjoyment that I saw a future where all the money I was saving would make me rich at the end.
At the start of my final college year, I had saved over N100,000. I was feeling rich! I couldn’t save much during the final year due to final project spending but I still had six naira figures sitting in my savings account! Little did I know that the choices I would make would turn six figures into two figures.
How I squandered my savings
The final year ended on a positive note. I was quite certain my grades would be great, so I had to have a little fun. I had exhausted the money in my bank account so I decided to use the money I had saved.
What better way was there to use the money I spent years saving?
I went on outings with a few friends. We went to the movies, ate some pretty foods, and had a great time because we were finally done with college. I took expensive rides around and even went shopping with the rest of the money.
When it was finally time to travel back home, I had only N2000 sitting in my savings account. I had to withdraw N1800 for my transport back home, and I was left with N200 which could only get me a bottle of soft drink.
In the last four years, I had never been flat broke, but there I was, back home with my luggage in hand and no money in the bank.
After college – N200
Lessons I learned from exhausting my savings
You never know how terrible life is until you’ve spent all your money including your savings. It feels like everyone has deserted you and all the money you spent on your friends was a waste (because it mostly was).
Luckily for me, I was home with family during one of the saddest periods of my life. I sat at home and prepared meals – this was the only thing I could do. I could not go out because I had no transport fare (and I wasn’t willing to ask for it). Deep down, I was troubled even though I smiled like everything was okay. Life feels hopeless when you know you don’t have a penny to your name. one wants to feel this way.
It’s not easy getting your savings back
After a few weeks for groaning, cooking, and eating all the foodstuffs my mom bought, I finally decided to put my life back on track. I sat down and drew a plan, studying all the openings I had on ground.
Finding a job was a difficult task, and finding a well-paying job almost looked impossible at the moment. It was then that I realized I fucked up. It would take a few months to get back what I had lost. Even when I worked almost all the time I was awake, I wouldn’t get it all back.
You can be more frugal than you thought
When you have a lot of money sitting in your regular account, emergency fund, and savings account, you sit and eat like a king. Whenever you see something you fancy, you ask for the price and drop your debit card. Everything looks affordable until you hit rock bottom.
Sometimes, I tell people that the time they’ll truly learn the techniques of saving is when they have nothing to live on.
Even when I got a job that paid enough, I saw things I would purchase on a normal day without hesitation, and ignored them. I had been bitten once and I couldn’t go through that again.
Below are a few tips you should follow to prevent yourself from emptying your savings
Want to Spend Your Savings? Here’s How Not To
Don’t get a card
The mistake many of us make when we decide to open different savings account from our regular account is that we request a debit card for our savings account. When there’s an easy way for you to get money, you don’t have to think so much to pull out your card whenever you need something.
When next you’re registering for a savings account, don’t request for a card. This way, you can keep throwing your money in there without having an easy way to pull it out. You would then have to look for other options whenever you’re in need of money.
If you have already gotten a debit card for your savings account, it’s fine. Hand over that card to your most trusted friend and tell him never to give it to you again. I have some friends who would break the card once they make their resolve.
Whatever you do, never be with a card linked to your savings account.
After college, it was like every rule I gave myself was thrown away. I stopped thinking too much about the consequences of my actions, and I just spent money as goodies came along. Being prudent keeps you and your pocket in check.
When you know how to handle your finances better, your regular account wouldn’t run dry, and you would not have to think about your savings.
Before you purchase an item, think about how important it is. Will you be in any form of harm if you don’t get this item? For how long is what I’m buying going to last? Am I just trying to get it because I have the money to? Is there something better I can purchase instead?
Let these questions flow through your mind as you make the decision or whether to carry out an action that requires you to spend some money.
Make a list
Making a list is a habit of prudent people. If you don’t have the time to create a spreadsheet, get a journal and pen and create a list. Rank all the things you need from the most important (at the top) to the least important (at the bottom).
When the list is complete, go ahead and separate your needs from your wants. You would realize that your list gets shorter once you carry out these steps. Then, you can go ahead to allocate some money out of your regular account to each of these items on your list.
At the end of the month, you would find out that you didn’t exhaust what you had in your account and still have separate savings account filled with money.
You can then keep the change left for the month as your first Emergency Fund contribution.
What is an emergency fund?
It is that money you run to get in times of need when you’re out of options.
You do need an emergency fund if you really want to avoid touching your savings. While you may see this as saving twice, it is actually not so far from that. The difference between the emergency fund and savings account is that one is the period in which they stay without use. You can use your emergency fund during special cases but your savings account should remain untouched.
Get a side gig
If you really don’t know how to stop taking off your savings, try to get a side gig. There are various side gigs that do not require you to leave the comfort of your home. You can decide to work while eating breakfast at home.
Various freelance websites are available you can get freelance jobs such as Freelancer, Upwork, and Fiverr.
You can also get remote or part-time jobs to support your regular job.
The money made from your side gigs can be thrown directly into savings while you don’t save off your regular salary. This puts more money to be spent in your pockets.
Reward yourself for milestones
When you reach a milestone in your savings account, reward yourself by giving yourself a special treat. This encourages you to keep going. As you start small, get yourself smaller rewards such as buying a new pair of shoes for yourself, going out to a restaurant to eat something you’ve always wanted to eat but never gotten the chance to. As you hit bigger milestones, give bigger rewards like going on a trip to another town or country. You’ll keep yourself encouraged to save more and keep your savings off-limits.
Forbes shows you here how to reward yourself without ending up spending all the money you just saved.
If you’ve had some challenges with taking your hands off your savings, share them in the comment section and we would help you get through this.
If you want to learn easier ways to save for retirement, check this out