How to Survive in the Face of Rising Cost Of Living in Nigeria
Nigerians often say We dey manage so as to sound humble. But given the current state of the economy, many families are really “managing” to survive.
The prices of various consumer goods keep increasing daily, driven by the explosive dollar/naira exchange rate and other macroeconomic factors. You enter the market today only to find that staple items have doubled or more than doubled in prices compared to what they were just yesterday.
As a young bachelor or bachelorette, stepping out of the house is a financial risk. Because once your feet touch the tarmac, thousands of naira would leave your wallet. And you are left wondering how it even happened.
Things are tight. Costs are going up unabated. Yet most civil servants still receive the same salary size as before with very negligible adjustment (if any at all) to balance out the high inflation. So you’ll discover that the monthly income that was previously considered to be largely sufficient is now nowhere near enough to keep body and soul together before the next payday.
However, Nigerians are bred to be resilient. People will keep on surviving; some faring better than others. And no matter where you find yourself on the survival track – whether it’s “barely keeping up”, “not bad but could be better”, or “I’m good” – there are common-sense ways that you could follow to improve your situation.
Evaluate Your Financial Standing
This might sound pretty obvious. But still, it is better said than ignored. You already know how much you earn and how you usually spend it. However, to better understand your financial standing, you should use the “Worst case scenario” model to figure out what your life would be like if certain realities were to come to play.
For instance, “How would things go if this month’s salary doesn’t enter?” “What would happen if my landlord decides to increase the house rent?” “How will I manage, assuming I get laid off?”
While the typical Nigerian would say, “God forbid!” playing this game will help you start putting things in order, to ward against sudden financial bottlenecks. Therefore, in addition to knowing how much you are earning now, also take note of your overall net worth. Are there assets you can exchange for cash if push comes to shove? Do you have savings in the bank? Are there debts you can call in? By figuring out all these, you will know how you truly stand. This will encourage you to start taking steps in the right direction. Perhaps by automating your savings, living far below your monthly income, finding ways to reduce your current monthly spending – see if there are expenses you can let go of or significantly lower, finding cheaper alternatives, and so on.
Buy In Bulk
A great way to save costs is by buying the essentials in bulk. Bulk purchases not only let you spend less in the long run but will also enable you to budget better. A bag of beans will cost less in bulk than buying in painters, and so will a pack of tissues rather than getting one single roll every other week.
However, the problem with this idea is that you might not be able to afford to buy in bulk due to the high one-time purchase cost. In that case, it would serve to find purchase partners: People with whom you can put money together to buy things in bulk. Then you can split the items after. You’ll find that you will save so much this way.
Don’t Put All the Load on One Pocket
Apart from your primary source of income, you should have other ways to earn more money. This is no time to say that you are not an entrepreneur. Desperate times call for desperate measures. Hustle by all means. Whether it’s to apply for a higher paying job, ask for a raise, start learning a new skill to boost your income, or wisely invest the little money you can spare, you name it. You shouldn’t depend entirely on one income stream. Spread your branches.
Try Beating Future Inflation
No matter how bad you think things are in the country now, they could get worse. So plan. Fortify yourself against continued inflation and price increases. Also, if you have savings, ensure that you are receiving sufficient interest rates on them or at least that the money is secured against value loss.