What should you do with your salary before you start spending it?
Most people receive their salary and immediately start paying bills, buying things, sending money around and enjoying themselves.
Then, a few days later, they start asking:
“Where did all my money go?”
The problem is not always that the salary is too small.
Sometimes, the problem is that the money already had a destination before you gave it one.
If you want to handle your salary better, try this order whenever the money enters your account.
First, pay yourself.
Before you start spending on everyone and everything, move a portion of your salary into your savings or investment account.
It can be 10%.
It can be 20%.
Even if you can only start with ₦5,000 or ₦10,000, start somewhere.
The important thing is to make saving or investing a habit.
Second, take care of important bills.
Rent, food, transportation, electricity, school fees, debt payments and other necessary expenses should have their own money.
Know what these things will cost you before you start spending freely.
Third, keep money for emergencies.
Life does not always follow your plan.
Your phone can spoil.
Your car can develop a problem.
You may suddenly need money for something important.
Having an emergency fund means you don't have to start borrowing every time something unexpected happens.
Fourth, give yourself a spending limit.
This is where many people struggle.
You don't have to stop enjoying your money.
Buy that food.
Go out.
Get something you like.
But give yourself a limit.
The goal is not to become miserable because you are saving.
The goal is to enjoy your money without allowing today's enjoyment to destroy tomorrow's plans.
And finally, don't increase your lifestyle immediately because your salary increased.
If your salary moves from ₦150,000 to ₦250,000, you don't have to suddenly start behaving like you earn ₦500,000.
Allow part of that increase to go towards your savings, investments and financial goals.
Your salary should not only help you survive the month.
It should also help you build a better financial future.
So the next time your salary enters, don't ask:
“What can I buy?”
Ask:
“What should this money do for me first?”
That small change in thinking can completely change how you manage your money.
What is the first thing you normally do when your salary enters your account?