33,000 isn’t really a lot of money: Here is how to use your “allawee” wisely.
Have you realized that what you thought was a lot of money does not seem like it is enough money once you get your hands on it? I felt that way when I saved up a large sum of money. I felt like I could buy everything. I bought a few things and poof! All the money was gone. I was broke again. I was also confused. I thought I had more than enough.
In February 2020, the Federal Government effected the new minimum wage and started paying corps members 33,000 naira. After years of rumors and disappointment, most of us were ecstatic. Ecstatic enough to believe that we are much richer than we were last year. As much as I would like to say this is true, it is not. An additional 13,200 is not enough for us to live the lavish lives that we want.
The first reality corps members have to face is that the value of the naira reduces the purchasing power of the new allowance. The inflation rate for 2020 according to Statista is 11.73%. That is why going shopping with 10,000 naira feels like going shopping with 5,000 naira. The new allowance would have been a good development if market prices were stable but it is really a bad idea to go to the market in your khaki. Trust me, prices will double.
The second reality we have to face is that the new VAT rate of 7.5% will affect the prices of products. Not all of them but a lot of them. So if you could buy 3 units of a particular item before, you probably will have to make do with only one now.
The third reality is that assuming adult responsibilities and living on our own takes more money than we plan for. This point is for the new batch of corps members and especially for those who have never had a place of their own and might have to survive without an allowance. Living on your own comes with so many expenses. From light bills to the bulbs exploding due to bad power supply to increase in the price of gas, you have enough to finish the extra N13,200. Then there’s all the people waiting for a little something from you (their cut from your new allawee).
Now that a week has passed and many (I included) have spent most of their allawee, it is time to think about how we can use N33,000 wisely. Everyone has some advice to offer on finances. From savings to investments to money doubling, the options are boundless. So instead of putting only my take on the issue, I asked fellow corps members what they think about making the best use of N33,000.
Making better use of your allawee.
1. Do not fall into the spending trap.
There is a spending trap. Goodnews Adekpe who is serving Taraba State explains that “…People think higher pay means expendable money. They are blinded to the fact that slightly higher pay means slightly better standards of living, so in this case, for example, a corper might still plan around 19,800 and squander the increased balance of 13,200. The mistake is they forget to scale their plans accordingly.”
Ayomide Akande, a corps member serving in Enugu state gives us advice on how to avoid it. “We probably all think N33,000 is a lot more than N19,800 because we were paid that at first. When you calculate rent, transport, food, and all other expense, N33,000 isn’t enough either. The first mistake is to actually think you now have a lot more money to spend. The money isn’t a lot more. Also, it isn’t necessarily for spending. This mentality is what really pushes you to spend more than you ought to. The simple way out of this is to simply do not spend any more than you used to.”
Valid point don’t you think? Having a little extra money can make you put an x2 on everything on your list just because you can. But in a few seconds, you will realize that N33,000 is not twice the amount N19,800 is.
2. Have a budget
Victor Adeyemo who is also serving in Enugu state explains that if you lived on a thousand naira a day, all of the new allowance will be gone in a month. Most of us spend more than 1,000 a day. There are things to buy, fix and repair. There are places to visit. He advises that “…you should plan ahead and include needs on the list to limit excesses. Most times, we have a rough projection of what we spend every month. Prioritize food, shelter, utility bills and clothing.”
Budgeting is tight and all but at some point or the other, we decide we cannot come and kill ourselves and spend in one day what we should spend in two weeks. I put clothing last on the list for a reason. If you are like me and thrift shopping is your weakness, make sure to put a cap on how much goes to unplanned trips to the nearby market. Everyone has frivolous things they want to buy. Put a cap on it by putting it in the budget and limiting it with a price.
3. Save
I am going to take this one. Stella Inabo, a corps member in Enugu state advocates saving up part of your allowance.
I use a rule I learned from a savings app blog. In their newsletter, they advise that we should divide our income into three. 50% on essentials, 30% to faaji and 20% to be locked up in savings. It helps to know that you are spending on the things you enjoy but you have taken care of the essentials and saved for the future.
20% is 6,600 and yes, it might be hard to put all that away but it is necessary. It is best to save before you start spending. Savings also require discipline which means no touching. Banks and savings apps help keep the money on lockdown so you cannot dip into it. If you want some of your 33,000 to remain after the service year, you really should start saving up now.
Goody Adekpe is back with some more advice. He says” Save with a purpose. Don’t just keep money in the bank for no reason. Attach a responsibility to why you’re saving up and you will be consistent at it”. Makes all the sense in the world, doesn’t it?
4. Invest
Farida Aliyu serves in Ogun state and recommends you should try out investment. Investment is risky business. It is best left to the pros but it can be learned. The risk comes with the benefit of more returns on your money. A small chunk out of the extra corps member are receiving could go a long way in a couple of years. I did a little research and came across some brands to follow to understand investing a bit more. You can click on any based on what you are interested in
a. Forex Investment: Not most people’s favorite but there is money to be made on the back of the volatile stock markets.
b. Mutual funds. Still getting around to understanding this and planning to start in February. Better decisions next month, my dears.
c. Halal Investments. It is possible to grow your money the halal way too.
d. Cryptocurrency: Bitcoin trading is intriguing and also a great way to make legal money.
You could also invest in a business. Find a business that does not demand a lot of capital and start it. You do not have to use a bulk of your allowance. You can save up a little every month before you go all in. A more convenient option is to take a loan. The NYSC Scheme has made it easy for us to access funds for businesses through the SAED programme.
5. Invest in yourself
Sounds a bit repetitive right? Goody Adekpe believes that, “…Investment in self is guaranteed by 200% returns. Never joke with it. Invest in yourself so you become valuable even after the NYSC scheme.”
Investing in yourself is basically spending money on making yourself more valuable. It could be enrolling in a certified course (online/offline) or paying to learn a skill or language. Jerry Uke currently serving in Enugu state has a note of warning on this one. ”Avoid paying for questionable trainings and certifications which you do not need”. Pick the relevant and certified trainings you need.
All returns come to you when you have completed your youth service and you are able to leverage these skills to move forward.
The truth is N33,000 is not a lot of money. It would be hard to survive on it if you live in an urban area (Lagos where you have to take expensive cabs) and a bit easier in rural areas (Shaki, Oyo state where everyone walks to everywhere). But most times we are burdened with duties and expectations. money is only enough when it is continuously generated from multiple sources of income. The option that exists is to take a side job or start a business that will augment our income. The most important thing is to be wise in handling money. The roaring 20’s will soon be over and we have a long life of financial responsibility ahead of us.
Let me know if you have any suggestions on how to make better use of the “allawee” by sharing a comment. I would also like to hear your financial experiences as a corper, if you have a relatable story, share a comment.
