Written by Nicholas Omonjeva

The consumption formula states that your income has two channels; savings and consumption. The part of your income that you don’t save, you will consume. It is what it is.

Next time you start wondering how your salary went, fiam! and we are still on the 10th. Just take your time to reflect on your savings and your spending.

I know people that they will save all their income and they will be eating biscuit and groundnut morning, afternoon and night. Due to malnutrition, they will fall sick and their hard earn savings will be used to treat their illness.

Some others will spend everything that looks like income to them. They only have one credit alert in a month and the other alerts are debits either for enjoyment or to settle bills. When emergency comes that has financial demands, they will be looking for urgent 2k everywhere.

There is another funny set of people that will stash their savings in fixed deposit account. You know such account doesn’t have debit card. When they are in a tight corner, instead for them to liquidate their deposit, they will come and be disturbing your peace of mind to lend to them.

There should be a balance between the amount you keep as savings and the amount you spend on consumables. I had a boss that spent 50% of his monthly salary. In two years, he paid himself a full year salary.

Please don’t do more than your power. If you can’t save 50%, please save 20%. Sha, just save something.

Lastly, as you are saving, you must have investments plans for your funds. Wealthy people don’t keep their money in the bank, they keep their funds in their businesses and still collect your funds as loans from the banks.

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