Kwaba Blog

5 steps to effectively save towards your rent

Having a roof over your head is one of the basic needs of human. This means you have to meet this need somehow. If you are not a Landlord, then you are a tenant and sometimes you can even be both.

According to research, over 50% of Nigerians in the urban parts of the country lives in rented apartments. Unlike most cities around the world, rent in Nigeria is mostly paid upfront annually and this only has led to many people unable to pay up at due date. Not that they didn’t make the money to pay the rent that year but because they believe “if I don’t get it this month, there’s always next month” until it gets too late and they get kicked out. The toughest month for Nigerians who pay annual rent is the month when rent are due for payment. We’ve all been there at different points in time.

So why continue with this lifestyle when there is a better way ?

It’s a big misunderstanding to think if you make a ton of money each month then you are on the safe side. While earning a lot of money helps, what will help you, even more, to live better is to have some positive saving habits. We know saving towards your rent can be a bit challenging but it is totally achievable.

See how it can be done;

1. Defining your Savings goal:

In this case, the goal is your rent. The rule of thumb in personal finance is to spend between 25 and 30 percent of annual income on rent. So for example, if you make ₦5,000,000 annual income, your annual house rent should range between ₦1,250,000 to ₦1,500,000. This means if you keep tucking ₦170,000 into some back wallet monthly, you can easily save up for your annual rent in just 7 – 9 months. This is easier said than done right ? We know.

2. Prioritizing your goal

After your expenses and income, your goals are likely to have the biggest impact on how you allocate your savings. Prioritizing your saving goal gives you a clear idea of where to start saving. Let’s say you are looking to relocate to a new apartment in the near future, on a different part or town where most likely, the rent is higher compare to your current apartment. You can start putting money away now.

3. Picking the Right tools – Kwaba

There are tons of app to save money but none would prioritize your rent goal like Kwaba does. The Kwaba app allows you to create target savings towards your rent and make sure you stay committed to reaching your goal by providing you with instant loans when life happens without you having to touch your actual savings. Kwaba also provides a convenient rent plan for renters which allows them to split their rent payment into monthly installments. It allows you to Rent Now and Pay Later. As if that’s not enough, another interesting part is the fact that your monthly “rent savings” will accumulate interest on its own.

4. Automating your savings

Automatic savings can prevent some of those needless buys by removing money from your account automatically so there’s less available for you to blow on nonsense. Also, some people slack in the savings department not because they egregiously overspend, but because they simply forget to transfer money from their bank account to their savings wallet or plans. The great thing about automating your savings is that that responsibility will no longer be on you.

5. Start saving now

The hardest part of saving is starting, then it gradually becomes a habit. Watching yourself get closer to reaching your rent goals would give you much happiness and motivation to work harder. It could take time, and it’s not always easy to have the self-control to avoid spending your rent savings. Just keep learning new ways to do this. Regardless of how you save for your rent, we can all agree that it should be our top priority.

Lastly, you don’t need to have hundreds of thousands of naira available to start your rent savings. Even putting a small amount aside every month can make a real difference over the long term. Financing might not be the finish line for success, it still means you are ready to start the marathon with the backing of fiscal endurance and with Kwaba as your favorite rent manager.

Download the Kwaba app to start saving towards your rent!

You can also read;

Why is it so hard to save money

5 obvious ways to save better than you did

Raji Oluwaseun

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