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    Monday, 19 August 2019

    How To Save Money When You Have Dependants

    Photo - ABC

    SO Nigeria has beaten India to become the country with the highest poverty rate. It’s really sad, but up to 87 million Nigerians are living in poverty.

    This is apparently a conservative estimate because the World Poverty Clock currently pegs the number of Nigerians in poverty at 91,029,334. And what does this high poverty rate translate to? High dependency rates too. This means that everyone who earns money has to support several other relatives from that salary. It’s called the ‘black tax’ because with our love for family, it is culturally practiced among black people.

    How then does one save with the black tax hovering over our heads? It might be difficult, and you might feel some guilt, but you can’t grow if you drain yourself trying to help others. Here’s how to save when you have dependants:

    1. Budget, budget, budget!
    Yes, budget again! Prepare a budget, and make room for what you can afford to give if you get the black tax call that month. In the event that you don’t, let the funds be rolled over into the next month. Budgeting means that you will not give above your means or give to others at the expense of yourself and needs.

    2. Prioritize needs

    Yes, your needs should come first, and there’s no need to feel guilty about that. Not meeting your own needs might cause you to lose the job that’s paying the black tax in the first place, and where would everyone be? Beyond this, you can learn to prioritize the needs of your dependants. Place the more urgent over the more frivolous, and give what you have budgeted.

    3. Learn to say no
    It won’t kill you. Say no when you can’t afford it. Say no when the requests are frivolous. Make them understand that you’re not an ATM. Of course, explain nicely, or your Nigerian relatives will go off telling everyone how proud you’ve become.

    4. Teach them to fish

    For younger dependants. You can reduce the black tax by having them do stuff for you that you would normally pay for. If you pay someone to do your laundry and chores, have them do it and pay them. This teaches them the value of good old fashioned hard work. Also, help them find jobs, internships, trainings, etc that will help them earn their own money.

    5. Envelope method
    The envelope method does help you save and keep to your budget, and it still works in this case. Use the envelope method for your recurring expenses like transportation and food. Ensure your main savings and the rest of your money are not immediately accessible. The only accessible funds should be what you’ve budgeted as black tax.

    The black tax can be really harsh on young people, but we feel a debt to our family that we can’t ignore.  We hope these tips help you manage your money better. (ZumiNg)

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