For most young millennials, their biggest expense in the year is having to pay for rent. Taking out that lump sum of account in one scoop can make you weak for the rest of the month, particularly in Nigeria where you usually have to pay that amount yearly.
Different people handle large expenses differently. We were curious about how people handled paying rent whenever the landlord came knocking, so we asked 5 people about how they came up with rent.
I pay for rent yearly. I usually save 30k from my monthly salary for this. My yearly rent is 650k a month. My share of the rent is 350,000 while my flatmate pays 300,000, so I try to put aside about 30k or so monthly. But times when my saving habit was terrible, I’d just wait for my end-of-year bonus and deduct the bulk from it. I’ve done that for the last two years because I didn’t save that well during those years.
Every January, the organisation I work with pays us a housing allowance. So automatically, rent is covered for me. But before this year, the allowance wasn’t enough to cover it, so I’d make it up with funds from my regular savings. The organisation deliberately pays it on January 2nd, far from the salary payday so that you won’t spend it together with your salary. It’s the most convenient thing ever.
You know that rent in Lagos no be child’s play. You always have to cacu and be on your toes. For me, I save up as much as I can. If it’s not enough, I call my folks at home that it’s either you help your boy or I sleep under the bridge; the choice is theirs. If they want me to get lost in the wilderness, they can ignore me. Before I know it, I receive credit alert.
Personally. I split the rent into 12 parts and save that amount monthly. I am very consistent with saving amount, no matter what happens. Once I receive my paycheck from work, I immediately deduct the rent amount.
Theoretically, I don’t pay for my rent from my salary. I let my alternative income generate the amount needed. Previously, my alternative income streams were enough to cover the amount. I used to pay about 1m less than what I’m paying now so it easily covered it. However, my alternative income streams are not always guaranteed. My alternative income is mostly freelancing and contract jobs that pop up randomly.