Broke before payday?
Don’t go broke before payday
Don’t go broke before payday
Giddy with excitement, Jane made her way into Surulere Mall. Hardly glancing around, she found her way into Pretty toes, a massive suite on the left side of the mall. Three weeks ago, on an outing with her friends, she had discovered the shoe of her dreams. A classy, chic, and unusual Jimmy Choo, nothing could stop her from getting it for herself ahead of Valentine’s Day, not even the fact that she had no money. Instantly, she gave the sales lady 20% of the price to tie down the shoe, promising to return as soon as salary was paid. She got her January salary alert and went to the mall to fulfil her promise.
Two weeks after, Jane dragged herself into the house, hissing as she realised there was no power. She called the generator guy again, and again he insisted she needed seven thousand Naira to fix it. Just seven thousand Naira, and she couldn’t afford it; except she wanted to walk to work the rest of the month. Who could have guessed the generator would pack up? It’s not that her job pays too little; she could just never spread it through the month. This month for instance, if only she had not bought those shoes or the human hair from Bimbola’s stylist. Now she barely had enough for essentials like car maintenance and the month was merely on its 17th day.
Many people can relate to Jane’s dilemma. You welcome salary with excitement, settling bills and buying at will for the first few days until your dwindling account gives you a red sign, forcing you to stop. You are already broke even though it’s still a long time to the next pay.
However, this situation is easily avoidable by simply drawing up a personal budget. A few days to your salary, write out the amount you are expecting and a plan as to how it will be spent. Start with your savings, then the ‘must haves’; items that are essential to your well being like house maintenance, food, transport, electricity. Etc. Proceed to the ‘would like to haves’ like aso ebi for your cousin’s wedding and the food processor your wife won’t stop talking about. Up next is the ‘Can do withouts’ like the belt you want just because it is fine or a new toy set for your baby who already has a lot of toys.
Often, as you write the list and input the corresponding cost, you discover the ones you will have to postpone or completely delete. You can use the percentage system to divide your income or actual values of items on the list. Remember to leave something for entertainment, emergencies and your faith (if applicable).
It is important to put the budget in a place where you can easily see it as the month progresses; by your bedside or on your phone. Your success rate depends on your compliance rate. The more you stick to your budget, the more money you have for the things that matter. You will also be able to save consistently. You can set up a direct debit order to your Mutual Fund Investment to ensure nothing gets in the way of your savings or financial goals.
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Most of your wealth may not make it to the next generation- Henry Hollingdrake.
At a round table discussion with our team, Henry Hollingdrake: representing; ARM Trustees Limited, stated that the chances of wealth being efficiently transferred successfully to the next generation without incurring liabilities and unnecessary risk combined with the ability to further invest free from any restraints and excessive taxation are more complicated now than ever before.
He buttressed that this is ironic given today’s world offers a lot more accessible tools for transfer and preservation of wealth. Tools like estate planning, wills and relevant estate planning vehicles such as Trusts and Foundations for example.
In breaking down this claim, he further explained that in today’s world, owning valuable assets does not always guarantee the value of the assets will be preserved when transferred to the next generation. In worse cases where there is intestate succession, i.e. no Will or mechanism in place to pass on wealth, this function is left to the state to decide.
Even if there is an estate plan in place, it would at least need to provide for adequate asset protection and future growth. One also needs guard against excessive professional fees charged against an Estate that is fraught with complications on death.
Engaging him further, we asked, if your claims are indeedvalid, how does one ensure that wealth is transferred and enjoyed by one’s next generation?
In his response, he stated that first, we must be willing to leverage estate planning tools like Wills, Guardianship documentation, Trusts and Foundations as well as the utilisation of relevant co-ordinated structure for larger and more complex estates. He explained that an Estate Plan be it local or international includes having strategies in place to manage: the effect of inheritance tax, ease of wealth transfer and business succession relating to investments, real-estate, your pension fund, and other assets, which could form a significant portion of your wealth.
An estate plan will help individuals and families with both local and international assets, investments and business operations give careful consideration and properly document their holdings to ensure the assets are protected and passed on to future generations. This is effective, legally robust, practical and efficient. Estate planning offers you protection without borders, especially considering potential shifts in Residency and Citizenship, which may impact one’s wealth. The protection of effective management and ownership of a business operation can also be safeguarded by setting up a Succession plan.
Mr. Hollingdrake concluded the round table discussion by stating that familieswho seek to get started on understanding what is required for an estate plan or indeed would like to set one up, can reach out to ARM Trustees Limited, an independent award-winning firm with over 20 years’ experience in this field and now also offering international solutions.’
4 ways you could lose money this February
