By Chinelo Audrey Ofoegbunam, Esq, ACIARb(UK), ACArb, AICMC, ACIS
Introduction
As a lawyer, you’re skilled at managing clients’ legal needs, but how well are you managing your finances? Saving money is the foundation of building wealth, yet many professionals struggle to develop consistent saving habits. For Nigerian lawyers, with unpredictable incomes and pressing expenses, mastering the art of saving can be a game-changer.
This week, we’ll explore practical saving strategies tailored to your profession and show you how saving is the first step toward financial freedom.
1. Why Saving Matters for Lawyers
Saving isn’t just about setting money aside—it’s about:
• Building a Safety Net: Prepare for slow months or unexpected emergencies.
• Funding Investments: Use your savings to seize investment opportunities.
• Achieving Goals: Save toward buying a home, furthering your education, or traveling (Short- and long-term goals).
Without a solid savings plan, achieving financial stability can be challenging.
2. Challenges Lawyers Face with Saving
• Irregular Income: Court cases and consultation fees may vary monthly.
• High Professional Costs: Bar dues, certifications, and legal resources can add up.
• Lifestyle Creep: As income increases, so do expenses, leaving little room for savings.
• Understanding these challenges helps you create a realistic and effective savings strategy.
3. Practical Saving Strategies for Lawyers
a. Pay Yourself First
This means setting aside a portion of your income for savings before spending on anything else.
How to Implement:
Allocate at least 20% of every income (salary, consultation fee, case fee, or retainer) to savings.
Automate transfers to your savings account.
• Why It Works: You prioritize your future before other expenses.
b. Use the 50/30/20 Rule
This budgeting rule helps you allocate income wisely:
• 50% for Needs: Rent, utilities, transportation, etc.
• 30% for Wants: Entertainment, dining out, etc.
• 20% for Savings and Investments: Build your financial future.
• Pro tip: Adjust percentages based on your income stability. If you earn irregularly, save more during high-income months.
c. Create Separate Savings Buckets
• Divide your savings into different categories based on your goals. For example:
• Emergency Fund: Cover at least 3–6 months of living expenses.
• Investment Fund: Money earmarked for future investments.
• Lifestyle Goals: Saving for vacations, a new car, personal milestones, etc.
• Pro tip: Use platforms like CEO’s Circle, PiggyVest, or Cowrywise to manage multiple savings goals.
d. Save in Hard Currency
The naira’s devaluation can erode your savings. Consider saving in dollars or other stable currencies.
How to Save:
• Open a domiciliary account with your bank.
• Use dollar-based saving platforms like Risevest or Chaka.
• Why It Works: Protects your savings from inflation and currency fluctuations.
e. Avoid Impulse Spending
• Impulse purchases can drain your savings faster than you realize.
• Tips to Control Spending:
• Wait 24 hours before making non-essential purchases.
• Use a shopping list to avoid unnecessary buys.
• Avoid social media popups
• Pro tip: Identify your financial triggers (e.g., peer pressure, social media, or stress) and develop healthier habits.
4. Boost Your Savings with Extra Income
When your legal practice experiences downtime, explore additional income streams:
• Legal Consultations: Offer virtual legal advice.
• Teaching or Writing: Conduct legal seminars or write for publications.
Invest in Passive Income Ventures: Real estate, agriculture, or dividend-paying stocks.
Direct any extra income toward your savings goals.
5. Tools to Make Saving Easier
Take advantage of digital tools to simplify the saving process:
• PiggyVest: Automate savings and earn higher interest.
• Cowrywise: Create savings plans tailored to your goals.
Kuda Bank: A user-friendly bank app for tracking expenses and saving on the go.
These platforms make saving consistent and rewarding.
6. Common Pitfalls to Avoid
Relying on Loans to Save: Avoid taking loans to fund savings—it creates unnecessary debt.
Not Adjusting for Inflation: Keep some savings in inflation-proof investments.
Over-saving at the Expense of Living: Balance saving with enjoying your hard-earned money.
Conclusion
For Nigerian lawyers, saving is not just a financial habit—it’s a strategy for achieving independence and security. By paying yourself first, creating separate savings buckets, and leveraging tools designed for professionals, you can overcome challenges and stay on track toward your financial goals.
Start small, stay consistent, and watch your savings grow. Remember, the best time to save was yesterday; the next best time is today.
What saving strategy will you implement this week? Let’s hear your thoughts!
__________CIA___________
Chinelo Audrey Ofoegbunam.
