Maximise your time, maximise your money and Your Time

Trading time for money is one of the hardest ways to make cash. But when it’s your job (or hobby, or second job), you must use it wisely or you lose. Since time is finite, every second wasted means dollars gone.

When you waste money, car payments may come up late, rent may be hard to make, or you may not have enough to buy the extras you want. Either way, wasting time hurts your bottom line.

Here are a few ways to help service-based business owners and hobbyists find more time, so they can make more money.

Start out with a detailed plan of what you must accomplish each day.

Never go to bed without knowing what you need to do the next morning (or whenever you work your gig). This is your Do-or-Die List. If you don’t do, your business dies, and so does your money. Create a focused plan before you sleep. Then, check it again when you wake up. Make it a habit to check it before you sit at your computer; it can help jog your memory before you get lost in the Facebook rabbit hole.

Schedule your most complex and time-consuming tasks when your mind is freshest.
 

If you work a primary job, this’ll require a little creativity. You’ll need to figure out your best days for getting things done. It may be at 8 pm in the evening, when the kids have gone to bed. It may be when you get up on Saturday morning and don’t have to work. Whenever it is, make sure you’re focused on your best and most profitable projects then.

To find out when your most productive hours are, follow these steps:

Keep a running log of your energy for two weeks, noting your energy in the morning (before work, if you have a “day” job), at lunch, in the afternoon (after work, if necessary), at dinner, and in the evening.

Rate your levels from one to five, with one being the least productive feeling and five the most. Chart your results to get an idea of your body’s patterns and energy levels. Then, start using that time to hit your hardest, most profitable projects.

Leave the stuff that can wait until you’ve taken care of the money.

If you have client work to handle, or products to deliver, the dishes should wait. Dinner is a different story, but you should put clean-up on the back burner.

Manage your email; don’t let it manage you.

Running a service-based business, especially online, means you’re at the mercy of your inbox. Answering each notification with drool to your chin means you’ll spend a large chunk of time fishing through other people’s baggage. Cut yourself loose.

There are courses on Udemy teaching you how to be more productive by mastering Gmail, and there are programs like Sanebox to help you beat the inbox blues. Take control of your email and gain at least an hour in your day.

Invest in time-saving projects.

If you’re busy tweaking your website or doing laundry, instead of doing what earns you money, then you’re wasting your time and, therefore, your dimes. I know people in my industry that don’t even touch their laundry or the house cleaning. And these people are insanely productive because of it.

These are investments well spent. Take a look at the activities that take up most of your time and budget having someone handle them for you. But, you don’t get to play while they tend to your “chores” — make the most of your investment and spend that time earning.

Prioritise.

Work on the money first. Leave the movies for the people who don’t have an agenda for earning. We all love vegging on the couch, but we have to be smart about how our time’s spent. If the goal is to collect minutes and earn dollars, be prepared for this — especially in the beginning.

Master your craft.

You’ll earn more when you can quickly crank out whatever it is you do.

The guy cutting grass knows how to mow four lawns an hour, when it takes you one for your own. He’s a master. He knows how to work quickly, so he earns more money mowing lawns than you would. Master your craft and you’ll also earn more in less time.

Your network will enable you achieve higher networth

Both network and networth are essential terms for the wealthy. The former refers to your contact list of associates, partners, friends and acquaintances cultivated over the course of one’s lifetime while the latter is one’s actual wealth as a product of what assets one has less what one owes.

Building your network eventually leads to an increase in your networth. This is because on the road to wealth you will need people and connections. No one just stumbles onto wealth without the help or input of others. Everyone who is wealthy at onetime or the other was aided, mentored and assisted by someone in their network. Yours will be no different.

It is commonplace to hear people bemoan the lack of connections as a stumbling block in their pursuit of wealth. This statement is untrue because everybody has connections. Take time to cultivate the people you schooled with, the colleagues you met on various jobs, your neighbours, co-worshippers in your religious denomination and you will be amazed that you have connections.

In order to cultivate connections start with carefully collecting the cards of everyone you meet. Stop throwing complimentary cards away! Ensure that within 2 weeks of collecting the card you get in touch with the person to refresh the contact. Don’t start by asking them for anything. Instead make conversation and make it a short one.

Keeping in touch without being intrusive or desperate will definitely resonate with your contacts. Within a short while they may begin to discuss business challenges and opportunities in your field during phone calls to them which you can politely recommend a solution. People who recommend solutions will eventually have opportunities to be of service to others and voila connections are established.

The onus is on you to invest in improving your professionalism and service delivery. Satisfied clients will draw others your way who also enter your network and more business is the result. Even those who may not be influential for now may become so in the future so don’t underestimate anyone.

It is also important to include that your network should also include those outside your field as there may be opportunities in other areas. Build contacts in every area where possible. Before long as you cultivate your network your networth will enter the realm of substantial wealth!

Relying on rental properties for retirement income?

Even though I’m contributing money to a retirement savings account on a monthly basis, and even investing in some dividend stocks in my individual investing account, I’ve always felt like real estate could be a better investment option for retirement income.

The idea started with a family member who’s doing just that: relying on a portfolio of rental properties, and one small business, for retirement income. This relative also has plenty of money in savings but hardly anything in the stock market.

He’s quickly approaching retirement age without having to think about where his income will come from. He’s already set for a comfortable retirement.

Does it make sense to heavily rely on rental properties for retirement income?

Is relying solely on rental properties a good strategy?

I know the common advice is to not put all of your eggs in one basket — and I agree. But isn’t spreading out your risk through several rental properties meeting this rule? Although, you’re still putting money in the same type of investment (real estate property) you’re spreading out the risk of not having income from one property alone.

Sure, there are things that can go seriously wrong with rental properties, like a horrible tenant, vacancies, leaky roofs, and a myriad of other problems. But there are also plenty of things that go wrong with the stock market.

The truth is, you just never know. Which is why it’s important to create multiple types of portfolios, with rental properties as one of them.

While I’m not trying to dissuade anyone from investing in the stock market (after all that’s what I’m doing), I do think it’s nice to stop every once in a while, reassess your financial goals, and look at other vehicles that drive you to where you need to be.

Find it hard to save money? You’re not alone!

Have you ever thought about where your spending habits come from? We all know that some of us have a hard time saving money, while others find it difficult or painful to spend their hard-earned cash.

Some of your money management style comes from your upbringing — the lessons your parents taught (or didn’t teach) you either by example or instruction. What’s interesting, though, is that children often grow up with very different habits for handling money than their parents or siblings. Why is this? Well, essentially it’s because of the psychology of spending vs. saving.

Researchers have spent decades performing studies on various groups to unlock the mystery of spending habits. What they’ve found is that there’s an area of the brain associated with unpleasant experiences that is more or less active when test subjects went through the motions of spending money.

Subjects who experience more activity in this area of the brain are those who are more hesitant to spend money, and experience heightened pleasure when they’re able to save money.

While this offers an explanation why some people are just naturally spenders and others are savers, it isn’t an excuse for poor money management (“I can’t help it; I’m just wired that way”). But neither does it offer a solution for making the most of what’ve we’ve been dealt.

If you’re a natural spender, and find it difficult to save money, you’re not alone. While your habits might not reach the extremes of compulsory spending, not feeling in control of your spending is frustrating, and dangerous to your financial stability.

The first step to dealing with a problem is acknowledging you it. Consider these ideas:

• Seek help from a ‘saver’ friend

• Ask for advice and strategies from a financial counsellor or adviser

• Put up safeguards to raise your own awareness for falling into old habits (eliminating credit cards, withdrawing money physically, etc.)

The harder it is for you to spend irresponsibility, the more intentional you’ll be about either spending anyway or stopping yourself in your tracks. so having these foolproof tactics in place will help you stay on track.

If you’re a natural saver, you might think you’re getting off the hook. Not so fast!

Those who find it easy to save may look like they have it all together — a healthy savings account, a good budget, financial goals — but under the surface, they may find it difficult to spend money (even when it’s necessary or helpful) without guilt.

Not being able to spend money on things you’ve saved for, need or want, can hinder your quality of life (think of Scrooge). If you’re responsible with your finances, there’s no reason to feel guilty about spending money.

To help yourself get over this problem, consider the following:

• Build up your excitement about purchases you’ve saved for (to push away the guilt). Associate more pleasure than pain with the act of spending

• Remind yourself how good you are with your money and that you deserve to enjoy it

• Consult with others when you’re feeling guilty

Just because you’re naturally more prone to spending or saving doesn’t mean you’re doomed to live with either disastrous or hindered finances. Are you a natural saver or spender?

Take a personal inventory of what’s been outlined here, and find out the psychology of your spending or saving habits. Then take the necessary steps to embrace this characteristic and make the most of it.

Review your plans as the year draws to a close

As we get closer to the end of the year, it’s time to begin to look at your vision and set goals once again. This will enable you take stock of successes and gaps, trying to understudy the challenges before planning a new strategy in the coming year.

Financial plans are plans made towards a achieving specific financial goal or goals. This requires regular updating or review to ensure that it is working as planed or needs an adjustment for effective realisation.

This week in our series of Old Mutual money management lesson brings to you why you need to review and update your financial plan and vision for effective realisation of long terms goals.

The Secret of the Leopard shows how important a visual image of your dreams is. If you regularly refer to your carefully thought-out vision, it will help inspire and motivate you to stick to your savings goals.

As you start achieving some of your goals, you will need to review and update your vision. Details of your goals might change over time with escalating costs. You might develop new goals to match your new earning potential.

New circumstances in your life might also make you change your goals. A new baby might change your priorities from saving for a fancy car to saving for an educational fund. Reviewing and updating your “Vision Map” regularly will set you on the path to better long-term wealth creation.

Many people who have achieved their goals such as “buying a new computer”, “buying new shoes”, “buying a house”, “retiring with enough money to live well” or “sending a child to a good school” will tell you that visualising their goal really helps them achieve it. The support of friends and family plays a vital role in keeping the vision alive. Your vision is wonderful. Why not think of it every day? The more often you think of it, the more inspired you will be to achieve it.

Keeping your vision alive

REFER to your vision regularly -keep it in a visible place.

RESEARCH your vision regularly – find the best value-for-money-and-energy.

REVIEW your vision regularly – update it to reflect new or more refined goals.

What life stages milestones should I prepare for?

At different points in your life, you are faced with new financial decisions and obligations. You need to plan your life in anticipation of those life stages. This means that, should you wish to get married around the age of 30 years, you may need to save enough money to have a wedding, buy a family home and start a family by this time. Therefore, you have to start planning and setting money aside for this life stage while you are single. Most of us do not know when is the best time to start planning for different life stages. Take this quiz to get an idea of when you should start.

Broke! But wants foreign education…check this

A number of schools in the United States offer free course which interested individuals can take advantage of to deepen their professional education.

Stanford University, The University of California, Berkeley, Massachusetts Institute of Technology’s (MIT), Yale, Duke University and Harvard all have free online course which participants can take advantage to earn certificates.

Courses available cut across fields of study including Data Science, Entrepreneurship, digital marketing, cyber security, cloud computing, Interaction design, music, communication etc. Most of course last for between three to seven weeks.

Typically downloadable books, multimedia material and analytical tools are available for free download. Students just have to indicate interest online and attend classes which are viral, they are also expected to do and submit assignment as at when due, during the duration of the programme.

Instructors are drawn from around the world but specifically from the schools administering the courses. At the end of the programme students are awarded verified certificates of completion by the institution.

There are about 105 institutions offering free courses, most of them from the United States while a good number are European. Courses are open to students from around the world.

Splitting assets and debts

You need to know what you and your spouse are worth together and what you’re worth on your own. It sounds like a big job but it comes down to a simple equation: Net Worth = Assets – Liabilities.

It does get a little more complicated. There are three categories of assets:

Joint assets

These are accounts that you have built together including savings accounts, money market accounts, mutual funds or a co-owned business.

Your assets

These are accounts that you opened before you were married and have been the only contributor to. Things that you owned before you married are also included in your assets.

Spouse’s assets

These are anything your spouse opened or owned before the marriage including an individual IRA or assets inherited from family members.

You’re both entitled to a portion of each other’s retirement benefits that were earned during marriage. In order to get part of your spouse’s pension or 401(k), you’ll need a lawyer to draw up a qualified domestic relations order, or QDRO (pronounced “quadro”).

There are several options, including a one-time payment, monthly payments at retirement, or a lump-sum payment that you transfer directly into your own IRA, where your money will continue to grow tax-free until you retire. IRAs can be divided without a QDRO, as long as the division is clearly specified in your divorce agreement.

Be sure to consider the future value of these assets. If you give up pension, for example, in exchange for keeping the house or up-front money, you may feel short-changed when you reach retirement age. A pension can be very valuable down the road.

You may need to appraise real estate, artwork and collectibles to determine their value. If you both own a business, you will need to value it to determine the amount needed to buy out the other spouse’s share of the business.

Information you will need

Gather your paperwork into one container, preferably mobile, that will help you be prepared and organised. Included should be:

Tax returns for the past five years

Retirement account records for both spouses

You and your spouse’s paycheque stubs to show current income and withholdings

You and your spouse’s employee benefit statements

Copies of all insurance policies including life, health, homeowners and auto

Current statements for all bank and brokerage accounts

Mutual fund statements

Copy of the deed or lease agreement on your home

Statements on all outstanding loans, including your mortgage and credit cards

Employer stock option plans

Copies of wills and trusts

Copies of powers of attorney

Receipts for major purchases

A copy of your estate plan

Copies of birth certificates and marriage licenses

Depending on what is being contested, you may also want to keep records for the following: A prioritised list of assets you want to keep. Your children’s records, including how much time you spend with them, the activities you do together, and the expenses associated with their upbringing.

Should you rely on “target” funds for your retirement?

In recent years, a “set it and forget it” approach to long-term investing has become increasingly popular. One of the ways this trend manifests itself is through “target date” retirement funds.

Target date funds are designed to automatically adjust as you get closer to retirement age. Your asset allocation is shifted from an emphasis on stocks to an emphasis on bonds as you approach your target date. It’s all supposed to happen seamlessly so that you don’t have to worry about it. Just keep investing, and your portfolio will take care of itself.

But should you rely on target funds for your retirement?

Problems with returns

One of the issues with target date funds is that you might not be able to plan for huge market events. Some target date funds still haven’t fully recovered from the stock market crash of a few years ago.

What happens when a stock crash happens just before your target fund starts moving your assets into bonds? You could end up “locking in” those stock losses as you end up in more conservative investments, which won’t offer you the chance to recover the losses.

In order to deal with this issue, you might need to switch to a fund with a target date that’s further out, or you might need to look for other ways to recoup some of the losses. The problem with relying on an automatic formula is that you so often see automatic responses — no matter what’s going on in the world outside.

Don’t get lazy

Another issue is that target date funds, and other automatic type plans, tend to encourage a certain amount of laziness on the part of investors. While you don’t want to get involved in too much active trading (the fees can start to add up and cut into your returns), you also don’t want to just forget about your investments.

Sometimes, it’s a good idea to check in on your asset allocation, and consider selling mutual funds, or other investments, that aren’t helping you reach your retirement goals. Obsession’s not good, but neither is ignorance.

Target date funds tend to get you thinking that it’s all “taken care of,” when it might not be.

Before you decide to invest in a target date fund, figure out what type of management it undergoes. Additionally, be prepared to check up on the fund. You want to see how things progress throughout your milestones. That way, if you need to make adjustments (like picking a longer target date), or if you decide that you’d be better served by doing something else with your money, you can make the move before it’s too late.

It’s important to pay attention to what’s happening with your portfolio. A target date fund may help take some of the pressure off, but it doesn’t relieve you of the responsibility of doing your own research.

Managing unusual intrigues in running a business

Tony, a business owner has been facing, not the usual problems of marketing his products, but HR-related intrigues. The family of his former operations manager, who is the chief suspect in the robbery of N3.2 million worth of his company goods, are attempting to use cheap blackmail to get him to drop the case against him.

Tony and Kale, his childhood friend are shocked to their teeth that the seemingly distressed wife of the operations manager had videoed a moment she was alone with him as evidence against him. But Shina, Tony’s mentor, a successful industrialist/business tycoon with over 20 years experience is not surprised at all. Shina has however cautioned Tony to avoid such future occurrence by taking precautionary measures.

Tony had a very fruitful discussion with Shina, his mentor after they left the police station. Acting on Shina’s advice, Tony has resisted the urge to contact the former operations manager or his wife. Tony actually has been feeling like phoning them and reprimanding them for attempting to defame his character. Rather, with Shina’s advice Tony phoned the police and gave the go-ahead to charge his former operations manager to court for the robbery case. He knew what would shock the operations manager and his wife even more were the charges he had made against the wife charging her for complicity in the major robbery case, her defamation of his character and attempted blackmail.

Tony gets to his office. The six staff involved in the ‘smaller robberies’ which they called profit-sharing are clearly apprehensive as to what their CEO would do. ‘Would they also be charged to court?’ They have been wondering.

A few days later, Tony deliberately ensures his office door is opened all day. No closing of doors that would allow anyone, whether male or female to play any hanky-panky, he tells himself. He summons the six employees involved. They are somewhat apprehensive when they see the young man sitting close to the door of Tony’s office. Tony has asked Kale to arrange security personnel to act as his aide during the period he would be tackling the HR-related problems.

The aide has brought in three chairs in addition to the four already in the CEO’s office. The six employees are the production manager, the collation supervisor, and his two assistants, the HR manager, who is the only female among them, and the Day-shift security boy. “Sit down, gentlemen and lady. They are clearly surprised. “By the way, the young man is Akpan, he is joining the company as my aide.”

They sit down, darting covert glances at Tony. The three senior employees – the production manager, collation supervisor and Mrs. Duduyemi, the HR manager have guessed rightly that the young man is not just an ordinarily aide but a security guy, judging by all that had transpired in recent times at their office.

They suspect he would be firing them all while sitting down and the young man outside is to keep anyone who gets wild with the CEO in check.

“I want us all to restart our working relationship on a fresh note,” says Tony.

“Eh? Uuuh? Oh? Really?” come their surprised responses.

Tony is acting on Shina’s advice. They have agreed that except it is proven that any of the six employees, involved in the small thefts under the guise of profit-sharing, is also involved in the robbery of N3.2 million worth of goods, they would be given a chance. Shina had told Tony, “You have to establish clear and logical rules that would help you minimise disciplinary confrontations with your employees. I have discovered over the years that the manner in which rules are established and enforced in an organization makes the difference between a smooth-running operation and a company be-devilled with such employee related problems as yours has had.”

Then Shina added, “First, any rules established by the company should be clearly spelt-out and reasonable, and workers should be consulted before the rules are adopted. The rules and the consequences for breaking them should be clear and well-understood by all workers. They should be enforced without partiality and all employees must understand the punitive actions beforehand. Your company does not have pre-established rules for taking out factory rejects without authorisation, so devising punishment for such actions now would seem unfair.”

“Does that mean you have forgiven us?” Akume, the collation supervisor asks, interrupting Tony’s thoughts.

“I want us to establish clear-cut rules and together determine the disciplinary actions that would be taken if anyone of us break the rules.”

“Us?” asks Mrs Duduyemi, “Does that include you.” Her voice trails off as she says the last word. “I mean, all of us?”

“Yes,” says Tony, “from now, I’ll double as the operations manager.” They are quiet, not knowing what that would mean for them.

“So, we are going to have a meeting of all staff.” As Tony speaks, he puts his phone’s ringing volume from silent to loud. He knows the formal operations manager and/or his wife have been trying to reach him on phone. He continues discussing the modalities of the meeting he would be having with them and the remaining member of staff. Sure enough, his phone rings. He has also put it on speaker and plans to change it to normal volume if it is not the formal operations manager or his wife.

“Hello,” says Tony.

“How dare you?” comes the voice of the former operations manager.

“Can you be more explicit?” Tony says calmly.

“How dare you mess around with my wife and then sue her for defaming your character?”

The six employees are wide-eyed as they hear that. Mrs Duduyemi covers her mouth to refrain from exclaiming.

Tony is still very calm as he says, “The first time I ever had any one-on-one discussion with your wife was when she came to my office to plead for me to drop charges against you for robbing my company dry.”

“You have been messing around with my wife and that is the reason you have roped me into a robbery I know nothing about!”

“So who is behind the theft of the N3.2 million worth of goods from my company premises over three months ago?”

“Ask those thieves!”

“Who?” asks Tony.

“Your production manager and collation supervisor, they are the thieves!”

Akume can no longer restrain himself. He leans over Tony’s desk and shouts. “How dare you, you robber!” Tony tries not to smile, things are working out as planned.

The recent VAT exemption on Capital Market transactions

You may already be aware of the recent waiver of Value Added Tax (VAT) on Stock Market transactions by the Federal Government of Nigeria. In case you don’t, here is a brief overview.

Overview

The Value Added Tax (Exemption of Commissions on Stock Exchange Transactions) Order, 2014 was recently released via an Official Gazette dated 30 July 2014 which became public in October. Based on the Order, the list of “Services Exempt” from VAT has been amended to include Commissions on Stock Exchange Transactions effective from 25 July 2014. The exemption is applicable for a period of five years from the date of commencement.

Specifically, the exemption relates to Commissions:

· earned on traded value of the shares,

· payable to the Securities and Exchange Commission (SEC),

· payable to the Nigerian Stock Exchange (NSE); and

· payable to the Central Securities Clearing System (CSCS)

The purpose of the exemption is to encourage more trading in securities at the NSE. This is clearly a laudable objective but how well the incentive will achieve this is far from being clear.

So what does this really mean?

VAT is an indirect tax and therefore it is borne by the final consumer. With respect to capital market transactions, any VAT charged on commissions and fees was passed on to issuers and investors as the case may be while stockbrokers, issuing houses, SEC, NSE and CSCS act as collecting agents. Given that VAT on services is not claimable as offset against output VAT, the cost is fully borne by the investors.

Therefore, with this exemption, it is expected that investors will benefit from reduced cost of transactions in the capital market. The exemption would also reduce compliance costs for stakeholders such as stockbrokers and the regulators in accounting and remitting VAT to the Federal Inland Revenue Service (“FIRS”). In practice however, the FIRS will still expect that nil VAT returns should be filed on a monthly basis.

Beyond the broad benefits outlined above, I thought to provide further insights regarding what the exemption really means and the likely impact based on publicly available information, which is by no means easy to come by.

Just to be clear from the onset, I am not against the granting of tax incentives provided they are granted for the right reasons; well thought out; properly articulated, carefully implemented and diligently monitored. I also fully support any and every initiative to develop and deepen the Nigerian capital market. After all, I am one of the privileged circa 2% of Nigerians (and you heard me, 2%) who are direct investors in the stock market. The issue however goes beyond me or any individual for that matter.

Here are some analyses of the incentive before I draw my conclusions:

· Based on the 3rd Quarter 2014 NSE Fact Sheet, the average daily value traded was N6.9 billion.

· Total commissions, fees and stamp duties payable on equity transaction was 1.87% for “Buy” and 2.19% for “Sell” resulting in a combined transaction cost of 4.1%. The rates are lower for fixed income securities such as government and corporate bonds.

· The VAT element of the combined transaction cost of 4.1% is 0.186% as a percentage of transaction value.

Based on the above, assuming about 250 workdays per year (that is, excluding weekends and public holidays), and disregarding the slight impact of the relatively lower cost of bond trading, the annual savings to investors (and by implication, cost to government) arising from the VAT exemption is N3.2 billion per annum at the level of Q3 value traded.

In simple terms, an investor who invests N1 million would now save N855 when buying and N1,005 when selling. It remains to be seen how this would sway existing or potential investors to deal in the stock market. In any case, the impact may well be more psychological than real.

The annual cost of N3.2 billion will be borne by the Federal Government to the tune of N481 million, States N1.6 billion and Local Governments N1.12 billion. This is based on the sharing formula of 15%, 50% and 35% respectively for the federal government, states and local governments in the VAT act. Given the dwindling resources available to government, this seems like a huge cost that may have very little impact. The money could have been more effective if spent on developing both hard and soft infrastructure for the stock market. One big challenge is that re-introduction of the VAT after the expiration of the Order in the next 5 years will be resisted. It will indeed be far more unpopular at that time than the popularity of the exemption now.

The only tax left on stock market transactions is stamp duty of 0.075%. There is withholding tax of 10% on dividends which may be considered as stock market related to some extent. There is no withholding tax on government and corporate bonds. Interestingly, the most developed capital markets in the world such as those of South Africa, the United States, United Kingdom, China and Japan have one form of tax or another including capital gains tax of over 20% in some cases. Therefore, there is little or no correlation between taxation of stocks and capital market growth.

What lessons can we learn from this?

Throwing incentives at everything without a careful impact analysis not only drains the treasury but may actually be counterproductive especially in view of the dwindling oil revenue. Government should develop the habit of quantifying the cost of tax incentives and waivers against the likely impact or benefits. As a nation, we can no longer afford to be complacent or arbitrary in our approach to tax matters. Times are changing fast.

Taming the next house rent monster

Most adults of workable and retired ages dread one day more than any other in a calendar year. Just the mere thought that this day is around the corner or at hand tends to make them break out in sweat or tremble with fear and uncertainty. Days come and go quickly but the day you have to pay your next house rent is a day many wish would never come.

Now house rent costs rank as the biggest expend in everyone’s cost outlay in a particular year; you would think that people would have this money on due date, but alas, they usually run helter-skelter during this period trying to raise the money. This shouldn’t be so. We should stop having jitters due to the huge cost, rather we must make plans to pay up

In my experience people usually leave it till very late before they consider the next payment. When it is 3 months to the next payment they try to piece it together, almost believing for a “miracle” to pay their landlord. Miracles do occur but not for things you should have properly planned to take care of such as your obligation.

The first thing you need to do to tame the next house rent monster is to embrace the “pay yourself first syndrome.” Whenever you earn money don’t rush immediately to spend it on your expenses. Instead focus on taking some from it towards investments and anything you want to save for which includes house rent.

Well you might be saying the money’s not enough for all your expenses, yes but no amount is ever enough. Expenses always rise to meet income. Notwithstanding when you pay yourself first you have something for your future which is one of the key secrets of the rich and wealthy

It also helps for you to work with a budget so you can track where your money is going to. This budget instead of making projections for inflows and outflows must have a series of rows under inflows for paying yourself first. Make sure to put the house rent account here. With a monthly budget you can make spending cuts on whatever is unnecessary or excessive thereby freeing up money for more important things. A budget essentially shows you where your money is going.

Next, divide your rent into equal monthly installments till the next rent is due and commit to putting these installments in an account that you cannot readily access. Go to the bank and give them a standing order if need be so that this money is transferred to another account without you having to do do by yourself.

You can also work with your partner or friend to encourage and follow up with you to ensure you do keep this money aside. Once done faithfully between 3-6 months it becomes easier to live within the means of the remaining balance left because you must have a roof over your head.

Commit to ensuring that your landlord gets the funds completely in one installment and before the due date. The problem with most people is they pay the current rent, inadequately plan for the next payment within 12 months, then they start running around 3 months to the time looking for where to borrow from.

Efficient money management thrives where you take it step by step in the achievement of your financial goals. It rarely occurs for a huge lump sum to just come into your hands that will solve all your problems at once. Those who cannot manage N1000 surely cannot manage N100,000 not to talk of N1,000,000.

There’s really nothing you cannot accomplish financially when you break it into smaller steps and take it one at a time.