I hope you've read my I need more money post, where I talked about how I live from payslip to payslip.
You see, I'm one of those guys who find it nearly impossible to have a savings. I only save to buy some fancy gadget, I find it extremely hard to stash away cash just for the sake of having a savings. I can barely do that for more than two months, 'cos every night my mind will keep coming up with auto-suggestions of what to do with the money.
What ruinous mind I've got!
So, how do I get the best out of my salary?
Well, everything with a bad side definitely has a good side too. Fortunately for me, my mind that makes it hard for me to have a savings also made it extremely easy for me to pursue a wholesome lifestyle, one that is devoid of (nearly) all bad habits I know. So, I end up spending money on just the real necessities of life and one luxury hobby (Swimming). The only time I spend money unwisely is when I have a savings.
At the onset of my working career I tried saving and ended up plunged into a vicious loop of living frugal in the middle of the month and extravagantly after pay-day and the beginning of the month. And believe me, I really tried to break out of the loop but it seemed beyond me to accomplish.
But with the help of my hard-working, though still ruinous mind, I found a great workaround. I found out that I love taking risks. My first swimming experience was in a big river; I put (nearly) an entire year scholarship grant into stocks (and happily lost all); spent my entire free cash after school on a DSLR camera right in the heat of my job search; went to Cotonou for a one-month French language immersion without having any contact there (and got robbed too)... And I'm mighty proud of taking those risks, without the tiniest feeling of remorse.
So back to the main question - how I get the best out of my salary?
It is very simple, yet powerfully more rewarding that saving. I surfed my risk-sea life, I opened a Mutual Fund account and automated a monthly contribution to it right in the middle of the Nigerian stock market crash. And you bet, I lost money again. But I won't trade it for a 12% annual interest rate savings account.
And I didn't stop there, I bought books on financial investments and how to make a kill in the stocks market. So, now I have a self-managed stocks account where I put my extra cash. And believe me, just watching my portfolio go up and down has brought new delight to my weekdays. And I've been learning mighty fast about the investment world, in fact, I recently worked my portfolio up from a 10% loss to a 10% growth and in a bear market too.
I invest based on Benjamin Graham & Warren Buffet's value investing principle. I went through all the companies listed on the Nigerian Stock Market, through their 5 years financial reports (couldn't get their 10 years reports) and sieved out the ones that kept growing their Equities, Earnings, Profits and Return on Investment Cash. Then I read extensively about their management, market position, industry trend and their future plans. I was able to narrow down to 4 companies (GTBank, Dangote Cement, UPL & Oando) in the entire NSE list at first, and now only 2 companies (GTB & Dangote Cement) are left standing in my value portfolio. I put 80% of my investment cash into my value portfolio and 20% in a speculative portfolio (Nestle & GSK).
So now, I basically spend a fixed portion of my salary on real necessities and swimming, then put the free cash in my Mutual Fund account and Stocks Account. Problem solved.
I recently sold one non-performing mutual fund I opened with Stanbic IBTC to cater for an emergency that arose with my job change last month. So, I still get the benefits of having a savings without the vicious loop it sends my mind on.
Voila! That is how I get the best out of my salary.