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Smart Budgeting: Tips to Becoming Your own Financial Manager

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Often, a journey of a thousand miles starts with a step. The same principle applies to the journey of financial freedom.

To build a strong personal finance core, budgeting must be taken very serious. In fact, it is the first step in the journey to financial independence.

Smart budgeting is very important if you want to live a carefree life. Do you want to have some fun travelling and experiencing beautiful places by the end of the year? Plan ahead. If you would like to enjoy the wonderful feeling of peace then you need to always work on your budget. Yes, you have absolute control over it.

Why is budgeting so important?

Today, many people find it difficult to manage their money. Managing money doesn’t have to be a hard thing to do.

It begins with smart budgeting. Fundamentally, budgeting has to do with your understanding about the amount of income you earn and how much you spend. To be on a good side, you would want to live beliwt your means. That is, spending less than you earn.

One of the top reasons for having a budget is that it helps you know where your earnings are going. It simply allows you to adjust your spending in order to save more money, live a good life, and avoid debts.

Again, smart budgeting allows you to set your financial goal(s). When you set a money goal, budgeting can help you achieve it faster. Are you fed up with a lifestyle where you have to live from paycheck to paycheck? Sure, you need an emergency fund in place for a back-up. The art of smart budgeting irons this need out early.

A lot of people are often stressed up when thinking about money. If you take your budgeting serious, you can easily reduce unnecessary stressA life where you don’t have to bother about money is worth living. It gives you peace of mind. Budgeting and planning your financial future is easy when you get it right.

Six Effective Strategies for Budgeting Smarter

1. Automate your finance. 

Thanks to technology, you can now automate almost everything. The tedious work of budget can be reduced dramatically. Leverage on it today.

Begin by having automatic transfers. You can use this to pay your bills at regular intervals. It is also important that you watch closely everything you automate. Cut off any monthly subscriptions that no longer add values to you.

When you automate your finances, it is easier for you to allocate expenses and bills – even before you spend it.

Do you operate multiple accounts? Just automate them all. This helps you to organize your finances. You can also transfer money from your regular account to your bills account (you can create one for this purpose. When bills come up, you would be able to pay them easily.

You can also create or download a financial statement. This is very important for budgeting smarter. Have an overview of your financial statement. It can be on an Excel sheet. There are also other websites that help you with this. With a financial statement, you have a perfect insight into your budget and finances.

2. List all your income.

If you want to budget, you need to know what goes into it. Your wages, allowances, a bonus, monthly mortgage interest refund, holiday pay, possible benefits, or rental income. Put everything in a row. When you can list down all you income, it becomes easier for you to have more control over your money.

3. List all your expenses and shop wisely.

You must be honest about all your expenses; small and big.

From energy bills, to rents, to transport, to foods, and other expenses – you must know where your money goes. If you start taking budgeting more serious, you will notice that your expenses are often higher. All those small impulse purchases do add up.

When next you plan to go out for shopping, be a savvy shopper. You would want to get quality as well as good discounts.

Today, there are great websites that offer good discounts on almost everything you need to buy (think LivingSocial, Buytopia, Groupon, and others). You will always find great discounts, from entertainment to travel, you will find a good deal.

Again, you can shop for second-hand goods. Kijiji is a good example of websites where you can find great deals. You will find quality goods if you take your time. It saves you more money and you can enjoy the value of those goods.

4. Adjust your budget every month.

It’s obvious that some of your monthly expenses may vary. Vehicle registration fees and getting holiday gifts are good examples.

Also, your income might change. That is, you may earn more if you have a side hustle.

For these reasons, you need to examine your budget at least once a month. You may check and adjust more frequently too.

5. Prioritize your financial goals and expenses

It is essential that you understand the clear line between wants and needs. You must strive to first focus on your needs – the essentials like house rents, foods, and others.

Other expenses like your financial goal of pay off your debt(s) are also very important. Same for saving for your retirement.

Don’t forget that one of the key purposes of a budget is to determine whether your money goes into what makes you happy and correlating to your values – or not.

For example, you can group your expenses using the 50/30/20 budgeting method. It means 50% of your earnings goes into what you need. 30% is allocated for your wants. The remaining 20% is for savings and debt.

6. Save and Invest for growth.

Developing the habit of saving a part of your income is essential in reaching your financial-freedom goal faster.

Plan to save at least 10% of your income every month. When you are used to budgeting smartly, you will notice that it is possible to save 10%.

But it is not enough to just save, you must invest. The money you set aside in your savings account can lose value as a result of inflation.

There are lots of investments today that can give you good returns in naira. Consult a financial planner in order to explore some options suitable for you. You can also drive into research by yourself.

Becoming smart with you budget needs practice. With the tips discussed above, you should be able to be your own financial manager. You will be good with money.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Finance

Agusto & Co Forecasts $22B Diaspora Remittances for Nigeria in 2021

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The pan-African credit rating agency, Agusto & Co has projected that Nigeria’s diaspora remittances will reach $22 billion by 2021, representing a year-on-year (y-o-y) rise of five percent.

The Lagos-based firm stated this in its “2021 Nigeria Diaspora Remittance Report & Survey,” presented to members of the public.

The report anticipated a further y-o-y rise of two percent in remittances inflow to $22.5 billion by 2022. According to the report, Nigeria’s diaspora remittances dropped by 12 percent to $21 billion in 2020, from about $23.8 billion the prior year.

Head of Research at Agusto Consulting, Mr. Jimi Ogbobine, while speaking during a webinar on the report, explained that the Nigerian diaspora remittances are still an under-researched subject despite its strong bankability credentials.

He said there have been very few target-market studies on diaspora remittances in Nigeria, adding that Agusto Consulting adopted a strategy by initiating research on bankable markets with poor research coverage.

Remittances are funds transferred from migrants to their home country. They represent household income from foreign economies arising mainly from the temporary or permanent movement of people to those economies.

Remittances play important roles in the economy, helping to meet the basic needs of recipients, fund cash and non-cash investments, finance education, foster new businesses, service debts and drive economic growth.

“Previous studies have also shown that about 70 percent of remittances are used for consumption purposes, while 30 percent of remittance funds go to investment-related use,” Ogbobine explained.
He pointed out that Africa’s estimated migrant remittances of $78.3 billion in 2020 represented a modest 12 percent of the global migrant remittances.

“However, only two states within the continent represent about three-fifths of the continent’s entire migrant remittances. Egypt’s diaspora remittances of $24.4 billion in 2020 are not only the largest in Africa but also represent about a third (31.1 percent) of the continent’s entire migrant remittance.

“Nigeria ranks behind Egypt with $21 billion which represents about a quarter of the continent’s global remittances. Morocco driven by its large French diaspora represents about eight percent of the continent‘s remittance inflows with $6.3 billion. Zimbabwe continues to suffer the effects of the dysfunction in its forex regime,” it added.

According to the report, all of Africa’s top seven diaspora recipients experienced dips in remittance inflows in 2020, barring Kenya alone which grew by 2.8 percent. It revealed that Nigeria recorded the worst contractions amongst Africa’s top seven in 2020 of about 11.9 percent.

“Nigeria’s domestic policy conundrum on foreign exchange creating as many challenges to the wider macro contractions caused by the pandemic. Outside Nigeria and Kenya, the other states within the top seven bracket experienced varying degrees of contraction in diaspora remittances of between five percent to 9.4 percent in 2020,” it added.

Diaspora remittances to Africa declined by an estimated 12.5 percent in 2020 to $42 billion, almost entirely due to a 27.7 percent decline to Nigeria, which accounts for over 40 percent of such flows to the region, the World Bank recently disclosed. The Bank, in its latest Migration and Development Brief, revealed that excluding Nigeria, remittance flows to Africa increased by 2.3 percent with a 37 percent growth reported in Zambia, Mozambique (16 percent), Kenya (9 percent) and Ghana (5 percent).

It stated: “Remittances to Sub-Saharan Africa declined by an estimated 12.5 percent in 2020 to $42 billion. The decline was almost entirely due to a 27.7 percent decline in remittance flows to Nigeria, which alone accounted for over 40 percent of remittance flows to the region.

“Excluding Nigeria, remittance flows to Sub-Saharan African increased by 2.3 percent. Remittance growth was reported in Zambia (37 percent), Mozambique (16 percent), Kenya (9 percent) and Ghana (5 percent).”

In 2021, remittance flows to the region are projected to rise by 2.6 percent, supported by improving prospects for growth in high-income countries.

The report noted that data on remittance flows to Sub-Saharan Africa are sparse and of uneven quality, with some countries still using the outdated Fourth IMF Balance of Payments Manual rather than the Sixth, while several other countries do not report data at all.

Giving further insight, the report said: “High-frequency phone surveys in some countries reported decreases in remittances for a large percentage of households even while recorded remittances reported by official sources report increases inflows.

“The shift from informal to formal channels due to the closure of borders explains in part the increase in the volume of remittances recorded by central banks.”

On remittance costs, the report stated that Sub-Saharan Africa remains the most expensive region to send money to, where sending $200 costs an average of 8.2 percent in the fourth quarter of 2020.

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Finance

Unity Bank to Extend More Funding to 120,000 Smallholder Maize Farmers

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No fewer than 120,000 smallholder maize farmers in Nigeria will benefit from Unity Bank Plc’s funding in the wet season farming.

Its Managing Director, Mrs. Tomi Somefun made the commitment while delivering a goodwill message at the unveiling of the first national maize pyramids and kick off of wet season farming programmes at the weekend in Katsina, Katsina State.

As a major stakeholder in the roll out of the CBN’s Anchor Borrowers Programme (ABP), Unity Bank was invited to participate in the events marking the unveiling by the Maize Association of Nigeria (MAAN).

Represented by Head, Agribusiness, Unity Bank Plc, Mrs. Patricia Ahunanya,  Somefun said the additional funding for 2021 wet season farming is in furtherance of the bank’s commitment towards supporting maize farmers in the country.

She noted that the strategic partnership with MAAN commenced in 2019 with the financing of about 37,182 smallholder farmers, with the bank increasing its financing tally to 70,604 smallholder farmers last year.

“The maize pyramids will go down in history as the first maize pyramid in Nigeria which demonstrates not only the resilience of our farmers but also the commendable vision of the Federal Government of Nigeria through the implementing partners. This should be replicated in all states with a focus on the crops that have comparative advantage,” Somefun said.

She noted that with agriculture contributing over 26 per cent to Nigeria’s Gross Domestic Product (GDP), and employing about 50 per cent of Nigeria’s working population in the rural areas, the bank will continue to make strategic investments into the sector in line with the Federal Government’s quest to attain food sufficiency, diversify the economy away from oil, create jobs for the youth and reduce poverty.

“Unity Bank is fully committed to its partnership with MAAN and this commitment will ensure the attainment of FGN/CBN target to meeting self-sufficiency in maize production through the association,” Somefun said.

President, MAAN, Dr. Abubakar Bello commended Unity Bank for its continued support of the farmers through its strategic role in providing finance to maize farmers.

“We cannot appreciate enough our financing partners, especially Unity Bank. Today, we have over 50,000 bags of maize in this pyramid, which will contribute significantly to Nigeria’s strategic grain reserves. This could not have been possible without the financing made possible by these partners. We commend them for this role and remain grateful,” Bello said.

He reiterated the commitment of the association to continue to meet the financing obligations and sustain the drive for increased maize output in this wet season farming.

Unity Bank had recently received similar commendation from Rice Farmers Association of Nigeria (RIFAN) over its strategic role in providing the necessary support to the association to explore the opportunities provided by the CBN’s Anchor Borrowers’ Programme (ABP).

RIFAN specifically commended Somefun for her leadership and doggedness in supporting the rice farmers through the ABP, which is playing a critical role in Nigeria’s quest to attain self-sufficiency in rice production.

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Banking Sector

Polaris Bank Set to Boost Nigerian’s Digital Banking Ecosystem, Unveils a New Digital Bank

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With the rising opportunities in the e-payment systems accelerated by the COVID-19 era sweeping across the world, there are indications that one of Nigeria’s leading retail franchise, Polaris Bank, has thrown its hat into the ring as it unveils a new digital Bank.

Feelers indicate that the Bank’s new Digital Bank which has for some time been in test mode amongst its staff and customers is set to grow its market share, targeting a new generation of digital natives and immigrants who are socially and financially aware of innovations in self-service and stress-free transactions. According to industry players, the long wait which greeted the launch was to ensure that the platform is robust enough to meet prevailing global standards and support other existing entities in the digital banking ecosystem.

As part of its enterprise transformation initiatives, the Bank has overhauled its IT infrastructure within the last two years and upgraded its digital capability. According to the Bank’s Managing Director/CEO, Innocent Ike, “this has seen the institution grow to earn the confidence of the banking publics, as it has been able to offer quality banking services at the cutting edge of technology.” The plaudits which greeted the Bank’s recently published 2020 financial performance, has further earned the Bank’s digital transformation efforts, a shot in the arm.

Polaris’ digital Bank, offers a suite of services not readily provided by competitors. Some of such bundled benefits include; access to instant loans, accessing the platform service without being a prior customer of the Bank, and end-to-end account opening without entering a physical bank.

One of the competitive benefits of the Bank is its creation of a collaborative ecosystem that enables Application Programming Interface (API) Banking. API banking refers to a system that makes a bank’s services available to other third-party companies via APIs. API Banking helps both banks and third-party companies augment their complementary specialties and offerings more than they can provide to their customers by themselves.

Through its API, Polaris Bank is reported to have so far onboarded new business start-ups, improved their market access, and ensured profit sharing with partners within the financial technology space. The Agro-businesses, educational institutions, e-commerce, are all set to benefit from the Bank’s platform.

According to recent data released by the Nigeria Interbank Settlement System (NIBSS), the volume of electronic payment transactions increased by 80 percent year-on-year to 54.07 billion in the first quarter of 2021 from 30.04 billion in the same period of last year.

As a result of the rise in e-payment transactions, income generated by banks via electronic channel transactions also increased by around 52 percent to N53.4 billion in the period under review compared with N35.2 billion in the same period of last year.

With the grand entry of Polaris Bank into the digital Banking space, it is expected that at the close of 2021, the 2020 NIBSS figures will grow exponentially and bolster the overall performance of the country’s e-payment ecosystem. Indeed, many youngsters and digital native enterprises constitute most of the population and the early adopters of digital innovation and lifestyle.

Polaris Bank is a future-determining bank committed to delivering industry-defining products, services, and digital platforms across all the sectors of the Nigerian economy. The Bank is a member of the United Nations Environment Programme Finance Initiative (UNEP FI), which seeks to engage the private sector and the global financial sector to help create a financial sector that serves people and the planet while delivering positive impact.

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