Payday is finally here! After 60 days of mild “famine” in January, you can now waltz into any bank and demand for your money.

For some people, salaries have already come in, for others who haven’t, it is expected to come in this week.

Whichever category you fall in, what is certain is that by the end of this week, you’d be flush with cash. This begs the question: “Now that you’ve received your January salary, what next?

Typically, the first thing that comes to mind is to pay bills; in fact, some people already have a truckload of outstanding debt that equals about 80% of their January salary.

Some have spent their entire salary in their head before it even arrives, while others are patiently waiting for the arrival of the weekend so they can splurge half of their salary in clubs/bars, and live from hand to mouth the rest of the month.

While there’s no harm in having a good time, before you go ahead to start paying bills and debts, have you actually paid yourself? Here is a list of important actions to take whenever you receive your monthly salary.

Pay Yourself First

Picture this scenario: you earn a monthly salary of 50,000 naira. When you receive this, you immediately spend 10k on paying your utility bills, 15k on groceries and feeding for the month, 12k on transportation costs, 3k on internet and communication costs, 7k on outstanding debt, and 5k on leisure.

At the end of the month, you have successfully paid: the utility provider, the grocery seller, the internet provider, and even the bus conductor or petrol station attendant, but you’ve paid yourself nothing.

All these people have gotten richer from you, while you have nothing to show for the salary you worked for and rightfully earned. This situation plays out every month, and you end up living from paycheck to paycheck throughout the year.

This vicious circle can be stopped simply by deciding to always pay yourself first immediately you receive your monthly salary/ allowance/ wages, take out a part of your income (a minimum of 10%) and put it towards things that would be directly beneficial to the quality of your life, like investing and acquiring assets that would make more money for you.

This money you’ve paid yourself belongs to YOU, and it should be deducted first before you begin spending on other things so that you’re not left with sorry stories at the end of the day.

If you do not start today to pay yourself first, at the end of all your years of work, you would have nothing to show for the years of salary you’ve received. So before you pay others, pay yourself first.


Spend less than you earn. Invest the difference

It is no longer news that the billionaires of this world do not live on only one stream of income, so if you’re surviving on only one paycheck, you’re intentionally setting yourself up for a crisis.

Investing is a great way to secure your future and earn additional future income. Now that you have successfully paid yourself first, that money shouldn’t be left lying in a bank account where it is earning less than 3% interest rate annually, it should be put to work by transferring it to an investment account where it is earning more money for you.

There are a couple of affordable investment options that provide you with competitive interest rates above Nigeria’s current inflation rate. Carry out proper research, ask the right questions, and put your money to work. The more your money works for you, the more wealth you’re able to create, and the less number of years you’d have to work.

Review your January financials

Before the start of the new month, you need to review your January financials; how was your spending habit? Did you cut down unnecessary expenses by 10% like you said you would at the start of the year?

Have you begun working towards increasing your savings and investments? Was your spending habit in January in line with your goals for the year?

When you carry out monthly evaluations of your financial goals, it helps you track your performance and generally keeps you in line with your goals.

Create a February budget

You should create a new budget for each month as no two months are exactly the same. The difference might require a slight adjustment when creating your February budget, so when reviewing your January budget, look out for areas where you exceeded your budget, is the reason for the excess out of your immediate control (say hike in transport fare because of increased fuel prices), and likely to continue in the new month? Then you need to adjust your budget accordingly to accommodate this economic reality.

Find time to create a budget before January ends, especially as February 14 is on its way, which could be a season of extravagant spending for some.

Plan ahead and budget for those expenses, so you don’t wipe out your entire monthly income on showing love. Most importantly, when your salary comes in this week, don’t forget to set aside at least 10% of your income, towards securing your financial future.

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Payday is finally here! After 60 days of mild “famine” in January, you can now waltz into any bank and demand for your money. For some people, salaries have already come in, for others who haven’t, it is expected to come in this week. Whichever category you fall in, what is...