Do you remember that time when your whole salary finished two days after payday? It was frustrating, right?
Here is the deal:
If you don’t have a good budget, your money will run out quickly. A good budget helps you monitor expenses and plan effectively.
However, a budget is not complete without a budgeting method. A budgeting method helps you determine how much you should spend on food or enjoyment or how much you should invest.
There are a lot of budgeting methods, some of which don’t work in this current economy. That is where the RICH budgeting method comes in.
What is the RICH Budgeting Method?
The Reserve, Invest, Control, and Hustle (RICH) budgeting method was built on key principles from different financial books. Books like Richest Man in Babylon by George Samuel Clason, Think and Grow Rich by Napoleon Hill, and Rich Dad, Poor Dad by Robert Kiyosaki.
These books have been there for over decades, but the principles still hold true today.
In my experience,
Budgeting methods like the 50/30/20 budget rule or the envelope budget method are good, but they don’t work in an economy where fuel is N1000 per liter.
Starting a business or upskilling is not cheap, and you need either of these things to thrive in this economy. These budgeting methods don’t make provision for this, but the RICH budgeting method does.
How Does the RICH Budgeting Method Work?
Let’s dive into how it works:
R: Reserve (10% to Savings)
The R stands for reserve. Reserve 10% of your income for savings. Having savings is important, especially with how the prices of things keep increasing. You can start saving as little as 1% of your income and increase the percentage as your income increases. Your income will increase if you try I and H of this method, but more on that later.
The beautiful thing about saving is that it is now easy. With Jollof+, you can automate your savings and even lock it for a period and earn 21.6% net interest p.a. Save today so you will be saved tomorrow.
I: Invest (20% to Wealth Growth)
Don’t be afraid; you don’t have to buy real estate in Banana Island to start investing. You can start small. Maybe invest in a small business in your neighborhood that has mouthwatering returns. Or buy small shares from big companies.
Start where you are and build your investment portfolio. However, it is important to have the basic knowledge of the field you are investing in. You can also seek counsel from professionals or people who have better understanding. Investing can help you secure your financial future.
C: Control (60% Wants and Needs)
It is crucial to control how and what you spend money on. You can budget 60% for necessities and wants. Spilt this 60% among food, clothes, outings, and other things.
It is also important to take out your debt before you budget for wants. Owing someone and going for a spa treatment is not right. Don’t you think?
Controlling how you spend will help you have a better lifestyle.
H: Hustle (10% to Learning and Earning)
The H is one of the key things that differentiate this budgeting method from the rest. Setting aside 10% of your income to take courses or start a business will help you build your wealth. You are investing in growth. If you have higher certifications, you can get a higher-paying job.
If you have a side business, you don’t have to wait for salary to sort basic needs. By prioritizing growth, you earn better, save more, and live better both financially and personally.
Want to know a secret?
You don’t need to adhere strictly to each percentage of this budgeting method. Every month has different demands. Some months, you need to budget more for wants or for a course, and that is okay. The key thing about the RICH budgeting method is to always have all these areas covered in your budget.
Will You Give It a Go?
No matter which budgeting method you choose, make sure it fits your financial plan. The RICH budgeting method helps you achieve your financial goals, plan effectively, and secure your financial future. Will you try this method?
