You've seen yourself smiling, lost in thought at what supposedly was a dream, you are having the time of your life on a yacht, living La Vida Loca.

Your dress and hair move to the rhythm of the wind while sipping on margaritas and laughing like you've got '30BG' in your bank account, or you've seen yourself tired of using your "Leggediz Benz" to and fro your office and you're daydreaming of when you will ride an actual Benz or at least own a car.

Why you need a savings plan

Now ponder this reality: Do you have a savings plan to fund your dreams, and can it keep you financially secure? If an emergency calls for your attention right now, can you confidently step up to the occasion? And if you have a savings plan, can your current plan save you?

Suppose your answer is in the affirmative; good! You can learn one or two more tips in this article, but if not, don't blink an eye. You need to take notes. 

Steps to developing a savings plan that works

We understand that saving consistently in this financial situation can be frustrating, and even when you have to save, you may struggle with discipline/consistency. But don't worry; this article has a more straightforward guide.

Let's look at how you can navigate these challenges with the following steps. 

Step 1: Access your financial situation 

First, put pen to paper and list out your income, your expenses and your debt. Your income is how much money you earn after-tax deduction, whether monthly, weekly or daily. If you're self-employed or a freelancer, use the least monthly income you've earned in the past year as your base income. 

After that, note down your expenses, such as Housing, utilities, transportation, health, entertainment, education, etc. This will give you a clearer picture of where your income gets channelled. If you have debts, add them under your expenses. 

Step 2: Set clear and achievable financial goals

Before you start a savings plan, you need to have a reason for saving to keep you grounded and motivated. Consider saving for a short-term goal, like an emergency or a car, or a long-term financial goal, like your house rent or Japa.

Then, decide the amount you want to save within a realistic time frame. Once you are able to do this, break it down into how many weeks/months you have to save for and divide the total amount by the number of weeks/months. For example, if the sum of N500,000 is what I need to pay my annual rent, I will need to save about N42,000 monthly to meet my goal. 

However, if your income cannot sustain your financial goals, you may have to cut down on some of your expenses or find another source of income to achieve them.

Step 3: Create a budget to identify savings opportunities 

Here, you will need to apply the 50/30/20 budget rule. 

• 50% of your income after tax goes to your needs. E.g rent, utilities, insurance, feeding e.t.c 

• 30% goes to your wants, e.g. vacation and other discretionary purchases

• 20% should go to savings and investments, e.g., an emergency fund (3-6 months of expenses), a high-interest savings account, or to offset debts. 

Although this might be hard to keep up with, considering the high cost of living, financial advisers suggest that you embrace some level of flexibility with the ratio. When you break down your expenses, you realize that maybe that fine dining weekly won't allow you to save consistently for your emergency fund. So, cut it down. 

Step 4: Decide on a savings method 

It's never too late to start saving. Start at the level you are. It gets easier for you to save when you automate your savings directly from your bank account/card, use fixed deposit options to avoid having access to your funds for a long period of time or use piggy bank apps to save a small amount of money. 

Step 5: Open a dedicated savings account 

Whether you have a small or large sum, reputable banks and fintech platforms like Moniepoint personal banking app can help you start your savings journey and grow your money. Moniepoint personal banking offers three savings plans that suit your needs, with a high interest rate of up to 16% p.a. and a minimum deposit of N1,000. 

Moniepoint personal banking allows you to power your dreams, and if you would like to withdraw, you won't be charged for penalties, depending on the plan you choose.

Step 6: Start small and increase savings gradually

Once you receive your first interest payment, it feels good, and you feel confident. This will encourage you to do more, knowing every naira saved is an opportunity to get closer to your dreams. If you receive a pay raise at your job or get cash gifts, don't hesitate to send extra funds to your savings account. 

You may be tempted to dip into your savings once in a while, and that's okay. However, do not lose sight of your goal. If taking money out will negatively impact your goal, resist temptation.

Step 7: Track and adjust your plan regularly

Once you have achieved certain saving goals, you can move on to the next one and plan accordingly. Monitor your progress, and if at any point in time you feel capable of stretching yourself financially or you want to open another savings plan for your long-term or short-term goals, please do so. But don't forget to reward yourself from time to time.

Tips for sticking to your savings plan 

Hard times call for hard decisions. That means you need to cut your coat according to your size. 

• If you eat out too often, reduce it and have home-cooked meals instead. 

• When you go shopping, stick to your grocery list and cut off any distractions to avoid impulse spending.

• Only buy what you need. Manage your wants.

• Keep track of your spending or expenses regularly.

• Apply for high-paying jobs to match your expenses

• Set up an automatic transfer from your bank account to stick to your savings goal

• Always remember the 'why' behind your savings plan. You can create a vision board to remind you.

• Reward yourself for achieving your savings milestones.

Common mistakes to avoid when creating a savings plan

You might be wondering why you can't meet your savings goal. These are the mistakes you may be making.

• Not setting SMART savings goals: Always target specific, measurable, achievable, relevant, and time-bound goals, or else you'll be stuck.

• Poor accountability of your expenses: You need to keep a detailed record and be honest when documenting your expenses. Knowing this is your best bet for creating a savings plan that works

• Saving for non-essential items: Identify your needs and wants and prioritize the non-negotiables. 

Why it all matters

If you haven't taken anything from this article, then maybe start by answering these two questions:

1. What keeps you up at night? 

2. How do you plan to stop it from haunting you tomorrow?

A savings plan isn't just about numbers; it's about peace of mind, financial freedom, and control. It's about building a safety net for the unknown and laying the bricks for the life you truly want.

Start small if you must. Start today if you can. You can start 

But whatever you do, just start! Your future self will thank you. here