#KeepingUpWithTheBills Episode 1 – Saving & Budgeting for your Bills
Bills are a very important part of people’s lives. For adults, paying bills is almost inevitable. Hence, it is important that there’s enough knowledge to go round when it comes to servicing these bills. BuyPower.ng launched the #KeepingUpWithTheBills tweet chat series because we want to help adults adopt the best practices when it comes to paying bills.
For example, help them understand the best ways to save for bills or show them why the process of Electricity Bill payments should be as seamless as BuyPower.ng provides.
The first episode of the #KeepingUpWithTheBills series hosted Feranmi Ajetomobi who is a Brand Storyteller at Cowrywise, a wealth tech company in Nigeria. The episode focused on “The Best Ways to Saving and Budgeting for your Bills.”
Best believe there were a lot of gems dropped in the episode.
Let’s show you.
Who is Feranmi Ajetomobi?
I am a brand storyteller with Nigeria’s top wealth tech, Cowrywise. In my spare time, I cook and teach people how to create amazing content.
Over to the Questions,
What are the best ways to go about saving for bills since they are recurrent and most times, due monthly?
1. Identify your heavy recurrent bills. For example, your rent.
2. Break them down into daily/weekly/monthly bits
3. Set up an automated savings plan for them.
4. Keep these plans locked up.
A good example, if your rent is 360000, save 30,000 monthly. That’s easier than coughing out 360,000 at once.
What are the three most important bills you think every adult should prioritize?
To be fair, this can be subjective. Although, I will say these 3+1 bills matter the most:
Honorary mention: DATA!
One interesting thing to do with feeding is group purchase. Pool funds together with friends and hire a trustworthy party to make purchases on your behalf. Alternatively, you can all agree on a market day—preferably a Saturday—to make the purchases yourself. This can be done monthly for major food purchases.
When creating a monthly budget, what percentage of your income is advised to go into servicing bills?
Once again, there’s no one answer to this. But if you can, cap all expenses at 50% of your income.
A Case Study
During the tweet chat, we had to bring in a real-life situation to make the whole process more relatable. Here was our case:
Consider Ope. Ope has a strict N20,000 budget for electricity every month. As things stand, s(he) discovered that this month’s purchase wouldn’t last her till the end of the month. What advice do you have for Ope?
The first thing Feranmi thinks Ope should do is to understand what really led to that and ensure it doesn’t repeat itself in the next month. Then he adds that allowances can be made for expansion.
Is there a science behind bills taking an upward spiral once income increases? Why is this usually the case?
Well, there isn’t a science per se but there’s something known as lifestyle inflation—your expenses keep increasing to take up your income. One way to battle this is through percentage budgeting.
What do you think are the benefits of budgeting for your bills?
Growing up we all learnt that budgeting helps us with planning our money and keeping us within our means. Traditionally, you’ll pick an item and assign a cost to it. This can be dangerous and can lead to lifestyle inflation. This goes on to defeat the intent of living within your means, and here’s where percentage budgeting can help.
For instance, if you allocate 50% to expenses, 20% to savings and 30% to whatever you choose, you’ll do better with saving. As your income increases, your expenses will increase but stay limited to that %. Your savings will increase also.
So, allocate percentages to specific buckets before you do a budget breakdown. You can review the percentage every 3 years, for instance,—with a focus on increasing allocations to savings and investments.
Finally, set up a crisis budget. That is, a budget you can survive on if things go south.
How does one find a balance between bill payment and quality of life?
This boils down to planning, again.
For instance, you want a great vacation with but your wallet is speaking brokenness. Set up a timeline, and contribute gradually. Also, such group plans will save you money. In summary, Plan comfortable contribution timelines & lookout for group experiences.
Tell us a piece of random advice every bill-paying adult should know.
Multiply your hustle, and learn to survive on the least income source. For example, you earn 200k from A and 150k from B—learn to survive majorly with B.
So, there you have it. It was a great time chatting with Feranmi. Follow us on Twitter to be notified of our next #KeepingUpWithTheBills series.
We are sure you want someone else to benefit from this wealth of knowledge. Do share with your folks.