By Destiny Uko
Living on a budget has never been more crucial. Increasing costs in electricity, food and even transportation have occasioned a cost-of-living crisis. In the face of this bleak reality, the immediate reaction is usually panic. Yet maintaining a cool head and simply reframing your spending habits may be all that you need to get through.
The first and most empowering step is becoming aware of how you spend money. Too often, we underestimate the power of little expenses. Snacks, quick bike rides, impulsive market purchases, etc., all add up.
Using a physical notebook or the Notes application on your smartphone, put down every single expense for the month. This will give you a clear sense of what eats up your money most.
Another strategy is the “envelope” system. Traditionally, people divided cash into envelopes for food, transport, and bills.
Now, thanks to digital-banking apps, you can recreate this model through virtual “pockets.” Splitting your income into dedicated digital wallets—supported by fintech apps like Kuda, Cowrywise and PiggyVest—helps you track spending and avoid exceeding your limits.
Automating your savings is yet another prudent move. Saving money can be hard when your income feels tight, but it becomes easier when you remove the temptation to spend it. Services like PiggyVest and Cowrywise allow you to set periodic targets, from daily and weekly to monthly saving.
You can even “lock” your funds for a fixed period, ensuring they are untouched until a future date. Starting with ₦1,000 a week might seem small, but it builds over time.
Food is one of the biggest recurring expenses and also one of the easiest areas to overspend. It is often cheaper and definitely healthier to cook at home than to eat out. Staples like rice, beans, and garri last longer and are more affordable when bought in larger quantities.
Cooking your meals also reduces waste and the need for daily trips to the market, which often lead to impulse purchases.
Transport costs, especially with the rising cost of fuel, are another major burden. It might be necessary to rethink daily movement. Walking short distances, using BRT buses, joining staff buses, or even cycling can reduce expenses significantly.
Utilities can also be managed more intentionally. Small changes such as switching off appliances when not in use, using energy-saving bulbs, and reducing generator use during the day can make a real difference. Installing solar lamps or rechargeable bulbs can help reduce reliance on NEPA or fuel altogether.
Shopping habits also deserve attention. Online stores like Jumia or Konga offer regular discounts, and price comparison can save you thousands over time. Always ask for a discount in the local market. Track discount seasons like Black Friday or end-of-month deals to stock up on household items.
It is important to be cautious with debt. Not all loans are bad, although some can pull you deeper into hardship. High-interest loans, especially from quick cash apps, can become overwhelming. Instead of relying on credit, consider building an emergency fund.
A good emergency fund covers at least three months of basic living expenses. It protects you from unexpected shocks like job loss, medical bills, or repairs. Even saving ₦5,000 per month is a start.
If you already have some savings, consider investing them to grow over time. Platforms like Risevest, Chaka, or Cowrywise offer access to treasury bills, mutual funds, and even global stocks. You do not need to be an expert. Just start with what you can afford and watch it grow steadily over the months.
Impulse spending is another challenge. You can control it with simple strategies like the 24-hour rule. If you see something you want to buy, wait one full day. You will often realise you do not really need it. According to KashGain, reducing impulse buys alone can save up to 20 per cent of your monthly budget.
Consider joining a community savings group, like an ‘ajo’ or ‘esusu.’ These traditional systems help people save consistently and access funds in rotation. When handled by trusted members or cooperatives, they are powerful tools for discipline and collective support.
Lastly, look beyond cutting costs. Growing your income is just as important. Diversify your earnings by picking up side gigs, freelancing, baking, tailoring, tutoring, cleaning services, or online selling. Many Nigerians are building small streams of income that eventually become major.
Nigeria’s economic climate is challenging, but with planning and consistent effort, you can take control of your finances and weather the hard times.
In light of rising living costs, including electricity, food, and transportation, budgeting effectively has become essential. Destiny Uko suggests several strategies for managing expenses, starting with tracking every small purchase to understand spending habits better. Utilize the "envelope" method digitally by using fintech apps like Kuda, Cowrywise, or PiggyVest to allocate budgets for food, transport, and bills, and automate savings to minimize impulsive expenditures.
Cooking at home to save on food expenses, as well as being strategic about transportation to minimize costs, is advised. Utilities can be managed by adopting energy-saving practices and effective shopping habits involve exploiting discounts and avoiding impulse purchases. Responsible handling of debt is crucial, emphasizing building an emergency fund and considering investments in platforms like Risevest and Chaka for sustainable growth.
Additionally, joining community savings groups and focusing on increasing income through side gigs can help stabilize financial situations in a challenging economic environment. These strategies not only aid in cost-cutting but also in cultivating financial security and resilience.
