Cultivating Good Savings, Spending Habits

Cultivating the habit of savings is a very important one; this habit can help you in many aspects of life.

A good saver can save out funds for business; a good saver is debt free; a good saver has already made a right and bold step to financial freedom and a good saver can reach certain goals that can’t be ordinarily attained with the limited revenues he gets.

According to www.financialgazette.co.zw, cultivating a savings culture is always ideal, but it’s never easy. Savings entails starving yourself off certain wants and pleasures, and that takes a lot of discipline. Many people want to save, many people wish they could save, but just a few save at the end of the day.

Cultivating good savings culture will definitely affect your spending habit as well.

There are certain ways you can cultivate a savings culture.

1. Assess your financial health

The first major step to savings is assessing your financial health; this would help you know the direction you’re headed and how to get there. You need to have a clear picture of your income and expenses; you need to know what takes the bulk of your money, and also try to ascertain whether you’re spending more than you earn. When you have this figured out then you can move to the next step.

2. Have a budget

Having a budget would help guide you on what you ought to spend your money on and what you shouldn’t. With a budget, you would know your needs and wants and have a clear picture of how to cut down on spending on your wants. Wanting to satisfy your wants would make you unable to save. A budget would help you plan better, save better and cut down unnecessary expenses.

3. Keep track of your spending

Your spending habits would determine if you would be a successful saver or not. Keep track of your daily lifestyle and what you spend your money on. After assessing where your money goes, look for ways you can minimise how much you spend.

4. Have a target

The best way to save is having a target; saving without a target might not keep you motivated, but saving for a target keeps you motivated and focused. Have a realistic goal and save towards it.

5. Be debt free

Try as much as possible to live a life free of debts. Manage your finances judiciously and avoid having to collect loans. Live according to your budget; this would help you in the long run.

6. Save for emergencies

Emergencies happen all the time; this is something we have no control over. The best way to handle emergency is to save, so you won’t be left out of the dark. Set about five per cent of your income monthly to save for emergencies, so you wouldn’t be left in the dark when the situation arises. Your emergency savings should be different from your normal savings.

7. Pretend you are paying off a loan

The best way to frame your mind-set towards savings is to pretend you’re paying off a debt. Continue making the monthly payments into your savings account. Even after you reach your set goal, never stop this habit.

8. Set your mind towards saving

Having your mind geared towards saving would help you save better. Also, if you notice you still have money left at the end of the month, rather than spend it unwisely, the best bet is to save it. This would help you reach your goal faster.

9. Set a fixed percentage

The best way to save is by setting a fixed percentage to be saved monthly. This way, when your income increases, your savings would increase as well.

10. Try to avoid gathering and friends that would give your saving a setback

Friends are important, but when you have friends that won’t let you save, it’s best to minimise the way you see them. Gatherings and friends that prompt you to spend money won’t only kill your savings but might even push you to spend above your earnings. www.elcrema.com

Four Ways to Maintain Proper Savings Culture

Most good savers have a good understanding of their expenses, know how to control them, are good at saving money, and know how to resist upgrading. Successful people usually follow four steps to prepare for and complete their goals. Let’s look at each step and how we can apply it on and off the long distance trails of life.

Know your expenses

First, you must know your annual expenses. Add up the amount you spend every year on all your major expenses, such as rent/mortgage, telephone, clothes, education, utilities, entertainment, transportation, fitness centre, and booze. There are software programs (e.g., Quicken and MS Money) that help you figure out your annual expenses, and for the frugal, there are free financial web sites (e.g., Finance Yahoo! and MSN Money) as well. The super frugal can get by with just a pencil and paper! It doesn’t matter what method you use, and you don’t need an MBA or a CPA to figure this out. Just get a rough idea. Are you spending N3m a year?; N5m a year?; N10m a year?; N20m a year?; or just N200,000 a year?

Continue to save despite the odds

Armed with that number, you can determine when it’s safe to summit. The more cash you have stowed away, the better you will weather downturns. How much cash is enough? The last recession in Nigeria lasted for 15 months. Therefore, saving a year’s worth of expenses will provide a sufficient buffer to weather nearly any recession. Once you have that level of protection, you can confidently adopt upgrades, as long as you maintain that one-year buffer. You can summit without fear. As a result, you will have the freedom to do what you love. Best of all, you’ll finally get to buy that deluxe barbeque set that your wife has been resisting.

If you live below your means and you control your desire to upgrade, you probably won’t notice recessions. Even if you are laid off, you won’t have to change your way of life. If you’re used to eating out twice a week, driving a Lexus, and schmoozing at the golf club, then you can still do that because you’ve saved a year’s worth of expenses. Although this will chew into your savings, you won’t have to tighten your belt (or at least far less than those who were overextended).

On the other hand, those who constantly push the envelope of upgrades and live on credit will have to retrench their way of life significantly. The process of cutting back is depressing for anyone. That’s why living beyond your means is so risky – you’re bound to get disappointed.

Resisting upgrades

Most of us don’t have a year’s worth of expenses saved. We feel pretty good if we have a month! Getting a year’s worth of expenses saved requires resisting every tempting upgrade until your life becomes highly inconvenient without it.

Always calculate nominal costs

Get into the habit of calculating the nominal costs of a reoccurring expense before committing to it. Figure out how much the subscription will cost you over a year, or even five to 20 years. When the next salesman tells you, “Hey, it’s only N500 a day!” remind yourself that it’s N182,500 a year, and ask yourself if that extra N182,500 at the end of the year would be nice to have in the bank. Or you can suggest to the salesman that if it’s only a N500 a day, then why not just give it away?

Understanding Dormant Bank Account

YOUR bank account becomes dormant if you don’t use it to perform any transaction for two years. Such transactions include withdrawal of cash at a branch or Automated Teller Machine (ATM), payment by cheque, transfer of funds through Internet banking, mobile banking or ATMs, receiving dividend on shares or the interest of your fixed deposit in your savings account.

Causes of Dormant account

According to data from the Nigeria Interbank Settlement System (NIBSS), there are 36.7 million dormant bank accounts in Nigeria as at December 31st  2017. The factors responsible for this huge number include illness and death. Also, ownership of multiple bank accounts has led to abandonment of some of the bank accounts that eventually became dormant.

What happens to dormant bank accounts?

The contents of a dormant account remain in place two years after you perform the last transaction. If you do not perform transactions in your account for an extended period and your bank has tried and failed to contact you over the required period of time the bank will qualify the account has dormant.

A dormant account can also generate debt. This is because it is still subject to fees, maintenance charges and other charges the bank may levy while you were using the account. If your account does not yield interest, such fees or charges can erase the balance of your account over time or even put your account in the red. In the case of savings and other interest-earning accounts, the fees can yield proceeds, depending on the starting balance. The fees and charges will continue to be debited from your account.

How to claim a dormant fund

According to guidelines issued by the Central Bank of Nigeria (CBN) in October 2015, on banks’ management of dormant accounts, the apex bank stated: “Three months to dormancy, the bank shall notify the account holder of the status of the account. For individual accounts that the bank cannot reach the account holder during the three (3) months period, it shall contact the next-of-kin to assist in locating the account holder(s). “This will be done within one month after the account has been declared dormant. For corporate accounts, the bank shall contact the directors of the entity or seek information from the Corporate Affairs Commission on the Directors.”

When you have been notified by your bank on the dormancy of your account, the next thing you should do is to first get in touch with your bank. They will check your account’s status and track down your funds.

The best way you can prevent an account from being dormant is to either keep using it for transactions or to close it yourself manually.

Source: Vanguard Newspaper

Hire Purchase

In business one requires different types of resources varying from simple tools to big machineries, men power, land, finance etc. The tools and machinery and such assets may be needed for a temporary period or a very long period. One may have adequate finance to purchase those or may borrow finance for fulfilling the need. But some may neither have adequate finance nor are in the position of borrowing the sum. What alternative is left to them? They can acquire the asset on rent, on credit, on installment or can go for hire purchase. They simply need to enter into an agreement.

Hire Purchase System

Hire purchaser takes the possession as soon as an initial installment of the price is paid but the ownership is obtained only after all the agreed number of subsequent installments are paid. However in case of default, the vendor can take back the possession of goods. It is also relevant to state that the sums paid by the hire purchaser, prior to the repossession of goods by the hire vendor, are treated as hire charges for using the property and the same are never refundable. The installments include interest and depreciation charges.

A hire purchase agreement differs from a credit-sale agreement and sale by installment because under these transactions ownership passes on signing the contract. Under this method, the purchaser does not need to spend the entire amount in one go or borrow a large amount of money, rather can procure the right for the immediate use of an asset. It is a financial facility that permits the use of asset in return of regular payments without transferring the ownership. In addition, the hirer acquires the right to buy the asset, after the use of an asset for a particular period on paying a small or nominal amount of money.

The acquisition of asset, specifically the expensive capital asset, calls for careful financial planning. There is no point making outright cash payment, but prudent to adopt the ways of spreading the cost over a period of time to match or coincide with that of generation of revenue by business. The hire purchase system is believed to be the most common source of finance for investment in capital assets.   

The assets that are suitably financed through this method are like:

• Tools
• Plants and machinery
• Cars
• Commercial vehicles
• Agricultural equipment
• Computers including software packages
• Office equipment, etc.

The system of hire purchase is governed by the Hire Purchase Act 1965.  This Act defines a hire purchase as "an agreement under which goods are let on hire and the hirer has an option to purchase them in accordance with the terms and conditions laid in the agreement”. The agreement defines very clearly and specifically the terms and conditions to be followed by the hirer and the owner:

1. The owner of the goods would pass them to the person who would pay an agreed sum of amount in cash or by cheque as specified or agreed upon, in the specified number of periodic installments;
2. The ownership of such goods would pass to such person only after the payment of last installment by the hirer in the manner as agreed upon;
3. The hirer has the right to terminate the agreement at any time before the transfer of such property.

Terms used in Hire Purchase Agreement

There are many terms that are used in hire purchase transactions and accounting, but only few are explained here.

1. Hirer: Also known as hire purchaser, the one who purchase goods under hire purchase agreement
2. Hire Vendor: The person who sells goods under hire purchase agreement.
3. Cash price: It is actual price of goods charged under normal cash sale or the price at which the goods may be purchased by hirer for cash.
4. Down payment: Down payment means an initial payment payable by the hirer at the time of entering into a hire purchase agreement.
5. Hire purchase price: The total amount payable under the terms of hire purchase agreement in the form of down payment and installments. In other words, the total of down payment and installments is called hire-purchase price. Hire purchase price = Down Payment + Installments. Since, installments are spread over a longer period, the seller charges interest and it is included in the aforesaid installments.  Hence installments include payment towards cash price financed and interest on the amount financed. Hire-purchase price = Cash Price + Interest
6. Hire purchase charges: Hire purchase charges are the difference between hire purchase price and cash price.  These charges are known as interest.

Calculation of Interest

The hire purchase price consists of (a) payment towards cash price, and (b) the interest.  The interest is charged on the unpaid cash price, which decreases with every installment paid.  Hence the amount of cash price and interest is not the same even in equal installment for the simple reason that on every next installment, charge for interest decreases and payment for principal increases.

Issues to look out for in a hire purchase (HP) agreement

Hire purchase (HP) is a way of buying equipment without having to pay for your purchase in one go. Payments of capital and interest are typically spread over three to five years. However before you go ahead and sign on the dotted line it is worth asking a few questions.

Before you sign any agreement, you need to know:

• How long will the agreement run for? How many installments will you be committed to paying?
• Are all the installments the same size, or - for example - are you paying less initially but a large payment (a 'balloon payment') at the end of the term?
• What does the installment payment cover, exactly? For example, does it cover servicing, or consumables?
• Who has responsibility for insuring the equipment? If you, is the cost of insurance included in your payments, or do you have to arrange that separately?
• Is there a usage (e.g. 'cost per copy') charge, and if so, what exactly is it? Will it be based on your actual or your estimated use? (Be careful: it is easy to be landed with a very expensive contract because of confusion over usage charges.)
• If the payments cover the use of consumables (for example, toner for photocopiers), exactly what consumables will be delivered, and when? What are the delivery charges, if any?
• Who has responsibility for keeping the equipment safe?
• What happens if it does not work properly?
• What happens at the end of the agreement? Does the equipment belong to you? If not, can you extend the agreement, and if so, is this at a reduced rate? Alternatively, do you have to give notice to end the deal?
• What is the tax position? (If you are buying the equipment, you should be able to claim capital allowances; if you are leasing it, you should be able to set the lease payments against your taxable profits).
• What is the position on VAT?
• Do you have to show your financial liability on your balance sheet?
• What happens if you cannot keep up the payments?

Using HP to purchase items for your business is like taking out a loan secured on the equipment. Always compare the cost of hire purchase with that of other finance, such as a bank loan.

Knowing Your Taxes | Starting Your Business

In Nigeria, all persons in employment – individuals who own a business, non-residents who derive income from Nigeria as well as companies that operate in the country – are liable to pay tax. Tax remittance will be a key aspect of your business compliance obligations and understanding the tax system in Nigeria and your state of residence will be important for the success of your business.

It is important for you to know that some taxes are payable to the federal government through the Federal Inland Revenue Service (FIRS), while others are through the state or local government.

Here is a list of taxes you should be aware of before you start your business.

Companies Income Tax (CIT)

Companies Income Tax (CIT) is a tax on the profits of incorporated entities in Nigeria. It also includes the tax on the profits of non-resident companies carrying on business in Nigeria. The tax is paid by public limited liability companies, registered ventures and partnerships.

CIT is administered and collected by the Federal Inland Revenue Service (FIRS) and contributes significantly to the revenue profile of the service.

In filing for CIT, audited financial statements are statutorily required. This requires the services of external auditors to prepare and/or certify the accounts to be submitted.

Stamp Duty Tax

Stamp duty is tax paid to the federal or state governments on documents such as conveyances on sale, bills of exchange, promissory notes, agreements, contracts or even documents such as letters and certificates of admission, instruments of apprenticeship, insurance policies, etc.

You will also be required to pay this tax when registering your company. The legal effect of a document which is duly stamped according to S.19 of the Stamp Duties Act is basically that it will be admissible as evidence in a court of Law.

The federal government has the sole authority to impose charge and collect stamp duties in respect of documents relating to matters between a company and an individual, group or body of individuals. While, the state government, on the other hand, has authority to collect stamp duty in respect of documents executed between individuals or persons at such rates imposed or agreed with the federal government.

Education Tax

This is  tax chargeable on all companies registered in Nigeria from chargeable profits as contribution to the Education Tax Fund. All registered companies in Nigeria are required to pay a percentage of their assessable profit into an Education Tax Fund. This tax is charged at 2% of chargeable profits.

Personal Income Tax

This is taxed charged on incomes of persons (which covers individuals, sole proprietorships, communities and families). If you are going to start any type of business, you shall pay tax for each year of assessment of the aggregate amount from every source of your income for the year. This includes profits from your trade or business.

You will be required to register with the State Board Internal Revenue to obtain a Tax Identification Number (TIN) or Tax Payer ID which will enable you remit this tax.

A TIN is an identification number for the person which is used by the Internal Revenue Service in the administration of Tax. A TIN must be furnished on returns, statement and other tax related documents.

Pay As You Earn (PAYE)

If you have staff working for you, they will be required to pay Personal Income Tax through the PAYE system. Under this system, you as the employer will deduct the prescribed tax from your workers’ monthly  salaries and pay directly to the Internal Revenue Service through designated banks on behalf of the employee.

The State Board of Internal Revenue and FIRS collect PAYE.

Value Added Tax (VAT)

All small and big businesses that deal with taxable products or services in Nigeria have to pay VAT. It is a consumption tax payable on goods and services consumed by any person, whether government agencies, businesses or individuals. It can also be defined as a tax on spending/consumption levied at every stage of a transaction but eventually borne by the final consumer of such goods and services. It is levied at the rate of 5%.

The VAT system is invoice based and not cash based.

VAT is primarily collected by the seller when any taxable item or service is sold. The seller then nets off the VAT and submits it to FIRS through a designated bank. The bank will immediately issue an e-ticket as evidence of payment.

To collect your original e-receipt, you will be required to present the e-ticket and bank teller as evidence of payment at the tax office.

Withholding Tax (WHT)

This is an advance and indirect source of taxation deducted at source from the invoices of the tax payer. Its main purpose is to capture as many tax payers that may have evaded tax into the tax net.

If your business or company supplies goods or services to another company an invoice will usually be issued as evidence of a transaction. The purchaser is also obligated to obtain evidence of remittance in the form of a WHT credit note on behalf of a supplier.

A WHT credit note will include the following:

1. Credit Number
2. The name of the tax payer (Purchaser of your goods or services who deducted the tax and remitted on your behalf)
3. The name of the beneficiary (Your company or business)
4. The deal and nature of the transaction
5. WHT rates are usually between 5-10%, depending on the type of transaction. Also, the collecting authority for this tax is the FIRS or State Inland Revenue Service.

Capital Gains Tax

Capital Gains Tax (CGT) is a tax on the profit obtained from the disposal or exchange of certain kinds of assets.

All companies registered in Nigeria that earn from the exchange or disposal of any form of assets whether in Nigeria or outside are liable to CGT.

CGT is 10% of the profits from sales of the qualifying assets.

Hotel Occupancy and Restaurants Consumption Tax

If you decide to go into the hotel or restaurant business or you operate an event centre, you should be aware of this tax. Any such establishment is expected to pay 5% tax on goods and services consumed by customers.

This tax is paid only to the state government.

Conclusion

It is advisable for you to hire a tax consultant/accountant who understands all the tax requirements to help you correctly prepare returns and calculate payments. This will save you the stress of dealing with tax authorities and paying huge sums in penalties which will may erode your business profit or run the risk of the tax authorities shutting down your business.

Entrepreneurship fund: Bank of Industry opens portal for corps members

The Bank of Industry (BoI) has commenced the third batch of its Graduate Entrepreneurship Fund (GEF) programme, targeted at serving members of National Youth Service Corps (NYSC) only. To this end, the bank has opened a portal, www.boi.ng/gef, for NYSC members to apply for the fund. The portal which will open for three weeks closes on 7th February 2018.

The GEF programme encourages business idea competition among entrepreneurial youths. BoI stated: “Only top 1000 candidates will be selected to participate   in a four day training to be held in 7 centres across all geopolitical zones of Nigeria. “After the training, candidates will be required to develop a more detailed business plan in line with the lessons learnt at the training and their business plan will be evaluated for funding in line with the GEF product program.” The GEF scheme is the BoI’s first youth programme which was launched in October, 2015 and is implemented by the bank in partnership with the NYSC Directorate. The initiative is specifically targeted at youths undergoing the mandatory one year national service programme. The aim is to change the job-seeking mindset of Nigerian youths to entrepreneurship and self-reliance by encouraging them to develop skills for self-employment and to contribute to the accelerated growth of the national economy.

Again, visit www.boi.ng/gef to apply.

MFBs Will Follow Macroeconomic Trend In 2018 — CEOs

Chief Executives of Microfinance Banks (MFBs) have projected that the performance of the subsector in 2018 will follow the trend of macroeconomic indices during the year. Speaking in different interviews with Financial Vanguard, they expressed optimism about improved performance notwithstanding the numerous challenges confronting the subsector.

Managing Director, Supreme Microfinance Bank, Mr. Jide Aremo, stated: “I believe that we have seen the government in power doing a lot of things, but these things are not coming out. I want to believe that as these things are coming out, more money would be pumped into the economy. It would reflate the economy because salary earners would earn more and small savers would be able to do some things. Our loan portfolio would grow and the bad loan portfolio would reduce and that would be better for the industry in the economy.”

Managing Director, NPF Microfinance Bank Mr. Akin Lawal, added: “Macroeconomic indices, generally, determine where we go. If the MPR is 14 percent, inflation rate is about 17 percent and we have poor power supply and a weak purchasing power, then, the next thing to do as an institution is to know how to study and see how you can operate successfully even with all those challenges in place. You are not an island to yourself, economic indices determine how you flow.” Lawal stated further “One thing I must say is that this economy is throwing more people into the poverty level, which means the customer base of microfinance is expanding. But then, you don’t want to lend to indigent but to people who are economically active and are ready to do something. We have hope. The hope is that Nigeria has come out of recession where more people are going into export and the non-oil export is on the increase even though it is not up to the point we expected but it is growing. With that, there is hope that we can improve on what we have done in 2017. My take is that we need to study the economic indices and see how we can operate successfully in spite of the country and its challenges.”

On his part, Managing Director, Accion Microfinance Bank, Mr. Taiwo Joda, said: “For the microfinance, we are a very strong member of the Nigerian Association of Microfinance Banks, NAMB, and we have consistently been a strong advocate of financial inclusion. It would amaze you to know that over 80 percent of eligible Nigerians are excluded. What we have done is to look at ways of making it easier for these people to open account. We are also representing the NAMB to engage the Central Bank of Nigeria, CBN, and other regulatory authorities to ensure that this sector is not left out of things. When we talk about people who are financially excluded, we also look at those with physical disabilities.

“For us as a bank, in the New Year, we are setting out to serve our customers better. The first thing is to multiply available channels and access through which our customers can receive services through technology. We are going to deploy a lot of technological changes so that they can be able to use their USSD code, even though we have one but we are going to make the digit easier to recall by introducing a new USSD code. All our customers would be able to do business on their internet platform, transfer and receive money wherever they are in Nigeria and outside the country because we realize that we also serve a market that go as far as China to buy products to sell here in Nigeria.

We would be giving them platform that makes it easy for them to access their fund. They don’t need to go with plenty amount of cash to do business and fall prey of hoodlums and robbers on the road. We would be focusing on geographical expansion. This year alone we would be opening 80 more branches so as to reach those that have been financially excluded from access to loan and other financial services.

Source: Vanguard News

Improving Your Relationship With Money

The turning of the calendar year is traditionally a time when you feel inspired by the possibilities of a new start, a new beginning, and the onset of positive change. It can be a time that is empowering, energetic and life supporting; it can forever alter the trajectory towards a more successful money life.

But like any change, you want to consider the good, the bad, the ugly, and importantly, the challenges that transitions can bring.

You can conquer your transition by distilling it down to key essential components:

1. As Simon Sinek says, “Start with Why”. Understand not only why change is beneficial to your life but also that the outcomes are so powerful and important that no other choice remains. Begin with a declaration.

For example: I must become debt-free within the next 12 months; or

I must accumulate X Naira to go towards a down payment on a home, or

We must open and fund a school savings program for my child by February 1.

You get the drill; it’s about why, in your heart and mind, something must occur. These are known as your “Money Musts”.

2. The second step is to get a handle on where you are right now. If your “must” is to pay off your credit cards, then you have to know exactly how much money you owe, to whom, and how much money you have to reduce the debt. Using credit card debt as the example, you might need to tighten your belt and alter some of your spending decisions to a greater or lesser degree. If paying off the cards is so important, ask yourself what you’re willing to do to make that happen!

The same question applies for savings and investment goals. If you cannot make more money, the cash flow needs to come out of your current spending and shifts need to be made in your spending habits.

3. Look back to look forward. Your money beliefs, habits and behavior typically stems from your childhood. What you heard, synthesized, and adopted from your early life becomes your “normal” in adulthood. However, just because this is what you grew up believing doesn’t make it necessarily appropriate or beneficial for you today. Consider that those beliefs, habits and behaviors might not support your adult values -
or your partner’s, if you have one. If that’s true for you, it’s time to rethink your beliefs, rewire your habits and realign your behavior to actuate your life today and your future goals.

4. Anchor past successes. Can you remember a time when you made a successful change? It doesn’t matter how small it might seem, but if you can recall what you did and how your mindset impacted the outcome, it can be a powerful tool in working towards success on your New Year’s resolution. Remember the feeling you had when you accomplished your goal; and use that sentiment to commit and motivate you to make future positive changes and money habits.

5. Consider the roadblocks. If you’ve ever been on a diet, you know that somewhere between the first day of eating sensibly and you reaching your goal, there will be a piece of chocolate cake, dish of ice cream, candy bar or bagel that looks you right in the eye and demands you to eat it - tempting you to veer off your track to success. Your ability to get past that “demand” is the difference between success and failure.

These transition periods can be hard to overcome, but if you know it’s coming and manage your expectations so as not to be surprised or off put, they are less difficult to conquer. This is where you need a support system, so that when that part of your brain is telling you to dig into some retail therapy or that delicious looking cookie, you need to be armed with the strength to resist. This is where having friends and professionals around you to help support you is so vital.

Surround yourself with those who have the expertise and the willingness to help support and guide you through the process of getting yourself to where YOU want to go.

6. Small steps rule! Setting up small steps leads to successes and lowers the pain threshold. Small steps are less intimidating and tend to be easier to envision; and thus take action on. If you are currently paying the minimum on the credit card each month, consider the following: pay your bill every time you get paid, not when the bill is due.

Taking this small advanced action step can make a big difference. Find places in your spending that hold less value to you than getting out of debt. Start with the areas of the least pain. For example, set a smaller entertainment budget by, say, N20,000 per month and adding that N20,000 to your payment. Think of the things you can change that won’t kill you, but that will help decrease your debt each pay period.

7. Missteps are common. It’s not uncommon to make mistakes. If you’re changing your eating habits, and one day you fall to the desire for a piece of cake, there is nothing preventing you from starting the next day anew with the understanding that a misstep is not fatal. The same applies to changing your money behaviors. You decide your goals and the road to get there.

8. Appreciate the journey. Celebrate each success Each step forward deserves acknowledgment. The act of focusing on what you did right sets up the next victory. Each dollar you pay off, or dollar that you accumulate, brings you closer to your ultimate goal. Don’t wait to celebrate! Build one victory on top of the other. You deserve it.

Your New Year’s resolution can be the beginning of a new, richer and a more purposeful money life. It requires awareness, action and support to take it from thought to action. I know you can do it!

Credit: Michael F. Kay, Forbes.com