The StatFin Database defines “low-income earners or persons at risk of poverty” as “those whose household’s disposable money income per consumption unit is lower than 60 per cent of the equivalent median money income of all households.”
For many citizens, an unforeseen paucity has become their present reality as they grapple with the rise in food prices, fuel costs, transportation fares, and electricity charges, among others.
Financial experts have linked Nigeria’s worsened crisis to the end of the fuel subsidy payment in June 2023 which has jacked up the prices of goods and services and has tended towards food insecurity.
According to the International Monetary Fund, given these factors, the household purchasing power and living conditions of many citizens have continued to deteriorate.
An accountant and auditor, Paul Audu, explained to our correspondent that individuals – regardless of their income – should learn to be prudent and save more to survive economic hardship.
Below are ways by which income learners can attain financial stability:
Be deliberate about saving
Audu stated, “Saving is not dependent on how much you earn, once there is an intention towards saving money, you will attain it.
“You can save five or 10 per cent of your earnings and make it a habit. Once you are used to saving, you will be prepared to meet up with unforeseen contingency that may crop up with the sharp increase in the prices of goods and services.”
Set your budget
A financial analyst, Livinus Uche, advised that low-income learners need to set for themselves an amount to spend on transport fares, electricity bills, personal care, and clothing.
“As a low-income learner, take your time to study your family’s eating and spending habits and create a budget to cut down on how you purchase these items. Set a realistic budget and make sure you don’t exceed it.
“You can use an app or enlist the help of an accountant to help you draw up a budget that will cover three or six months and forecast your expenses for future endeavours.”
Avoid debts
“One of the things that hold back many income earners from their financial goals is entangling debts,” stated Audu. “When you are enmeshed in too much debt, their interests keep growing, making it impossible for you to pay off the entire amount for a very long time.”
He further advised low-income earners to “set aside a small portion of their money each month to pay off existing debts.”
Prioritise your health
Uche explained that with the high cost of treatment and medicines in Nigeria, falling sick has been identified as one of the quickest happenstances that can make people lose their income.
He added, “Not only does falling ill make you unable to work, you also tend to fritter your income on treating ailments and with the state of healthcare in the country today, if you don’t have money, you won’t receive any medical attention
“Therefore, you should ensure that you follow up on your preventative care and visit the doctor when needed. Preventing an illness is better than spending your savings to cure it.”
Eliminate bad habits
“Aside from their negative effect on your mental and physical health, bad habits also siphon away a lot of money. Behaviours like sleeping with prostitutes, excessive drinking of alcoholic beverages, smoking cigarettes, gambling, drinking, making impulse purchases, etc harmful to your financial health.
“With the economic state, prudent income earners need to eliminate any bad habit that takes money from their bank accounts, even if it gives them a lot of fun while at it,” Audu said.
Cut entertainment expenses
Uche advised low-income earners to cut down on frivolous spending on activities that do not generate much value in the long run.
He stated, “Sometimes, digital TV, lodging in expensive hotels or resorts or purchasing expensive accessories are luxuries that can be foregone, at least for a while.
“Don’t live above your means and try to ‘keep up with the Jones.’ You can cut back and use free and low-cost ways to have fun. You can go for a walk instead of fuelling a car and driving or prepare your special meals or watch your movie at home instead of going to a fancy restaurant or a cinema.”
