UNDERSTANDING MONTHLY SAVINGS PLAN IN NIGERIA

If your plan this year is unlocking financial stability and building a good financial habit then this is for you. We are delving into the essentials of Monthly Savings Plans, the advantages, tips for starting and maintaining them.

TYPES OF MONTHLY SAVINGS PLANS IN NIGERIA

There are different types of monthly savings plans in Nigeria and knowing the one that exactly fits you is important to cultivate a sustainable monthly savings habit

  1. Bank Savings  Accounts: A Bank Savings Account is a type of deposit account offered by banks and financial institutions. It allows individuals to deposit money, earn interest on their deposits, and withdraw funds when needed. 
  2. Target Savings Accounts: Have specific goals in mind, such as buying a car or saving for your child’s education? Target Savings Accounts allow you to allocate funds specifically for those goals. This type of account, known as an Endowment plan in insurance, offers additional protection. In the event of an unfortunate occurrence like death or permanent disability, it ensures that the target amount is paid to your beneficiaries, regardless of whether you have completed your contributions toward the target amount.
  3. Rotating Savings and Credit Associations (ROSCAs): Ever participated in an “ajo” or “esusu”? It’s like a savings club with friends or family. Everyone contributes regularly, and each member takes turns receiving a lump sum. It’s a communal way to save and support each other financially.

ADVANTAGES OF MONTHLY SAVINGS PLANS:

  1. Discipline and Consistency: With Monthly Savings Plans, you commit to regular contributions, which instills discipline and helps you build a savings habit. It’s like setting aside a portion of your income each month for future needs.
  2. Interest Accumulation: Your money doesn’t just sit idle in your savings plan; it earns interest over time, helping your savings grow faster. It’s like planting seeds that yield a harvest of financial rewards.
  3. Goal Achievement: Whether it’s saving for a dream vacation, a new home, or your children’s education, Monthly Savings Plans help you stay focused and make progress toward your goals. 
  4. Risk Mitigation: Diversified savings plans like Mutual Funds spread your investments across different assets, reducing the impact of market fluctuations and minimizing risk. This way you do not put all your eggs in one basket.

TIPS FOR STARTING AND MAINTAINING MONTHLY SAVINGS PLANS:

  1. Set Clear Objectives: Define your financial goals and prioritize them based on your needs and aspirations. 
  1. Reach Out To Your Insurance Company: After defining what your goals are and prioritizing them, you have to reach out to experts that would advise on the best savings plan that suits your goals and finances. This is where Leadway comes in, you can reach out to us here
  1. Automate Savings: Utilize technology to simplify savings by setting up automatic transfers or direct debits from your salary or business account to your chosen savings plan. This helps make saving easier and eliminates the risk of forgetting to save.
  1. Monitor Progress Regularly: Keep track of your savings plan and review your progress periodically to stay motivated and make adjustments as needed.
  1. Stay Committed: Resist the temptation to dip into your savings for unnecessary expenses and stay committed to your financial goals. Structured savings plan like the Leadway Smart Cash Plan that set timelines before you can access your savings can be very helpful.

BOTTOM LINE

Monthly Savings Plans are a vital tool for achieving financial security and realizing your long-term goals. Take a step to understand the different monthly savings plans available to you.

Contact Us today.