It’s a fact that in life unexpected emergencies happen. To some people, It could be a blown transmission on the car, or even worse, the loss of a job. Whatever the situation might be, how prepared you are can make all the difference in a stressful time.
But among the many things covid has taught us, it’s how a large per cent of Nigerians have no emergency savings.
Unlike your regular savings, taking steps towards starting an emergency fund is your way of giving yourself the security of knowing you can cover unexpected expenses should the need arise.
Think of it as money that’s set aside in a separate account to be used for only emergencies. Managing this account requires lots of discipline since it needs to be used for true emergencies which do not include upgrading your wardrobe.
It may take time to build an emergency fund, but the process doesn’t have to feel stressful or overwhelming. It’s all about having a plan, and these four steps to help guide you:
As financial experts, we usually set a number as a benchmark for emergency funds, anywhere from three to six to 12 months worth of expenses, which is a great point to aspire to. Especially when you have other consistent fees like rent or school fees.
When you start an emergency fund the purpose is to have quick, easy access to your cash. To accomplish this, consider keeping it in a moderate to a high-interest savings account so that you can access it at any time. When considering how to start an emergency fund, think twice before investing in securities, since it will likely take days to unwind any positions to receive the money. Keeping them at a separate bank is advisable to reduce the temptation to draw from them when you’re checking the balance on your other accounts. Remember, out of sight, out of mind—well in this case, until you need them.”
It is important to treat your emergency fund just like a priority payment, Just like a pension fund, it’s important to pay into your emergency fund first.
When you start an emergency fund, set aside a certain percentage of your take-home pay each month and put it straight into your account. Sometimes the excitement from getting paid can make you forget or stall on this, which is why it IS advisable to set an automatic deposit on payday.
It Is important to remember that just because you might have reached your long-term goal to start an emergency fund, you shouldn’t stop there. Circumstances change all the time, through marriage or the birth of a child, things like this can cause your monthly expenses to increase as a result. If that happens, you need to account for it. The six months’ worth of expenses you originally saved may no longer cover you.
By learning how to start an emergency fund now, you can avoid serious financial problems later in the future, one way to take a step towards starting an emergency fund is by creating a savings goal on ALAT and as the months roll by, you’ll find you have peace of mind before you know it.
Just like most important aspects of adult life, taking out a loan is often a fact that almost everyone needs at some point. It could be for a new home, school fees, or maybe to start a business. Whatever reason you have to borrow money, you must never go in blindsided. In this article, we’ll discuss all the best ways to borrow money in Nigeria using the table of content below.
Professional financing options are many and varied nowadays, which range from traditional financial institutions, like banks, credit unions, and financing companies, to Internet Age creations, like peer-to-peer lending (P2P); from public agencies to your contribution in the National Contributory Pension Scheme, which is like having a 401 (k) plan in America.
Below, we’ll outline some of the more popular lending sources, explaining how they work and reviewing the pros and cons associated with each.
The bank is the more traditional route for those looking to borrow money, and for years people have depended on them as an unending source of funds. After all, if anywhere is expected to have cash, it’s a bank since they take in money in deposits and redistribute in forms of financing products like mortgages and you guess it, loans.
Although in most cases, banks charge a higher interest rate on the funds they give out, but they
are usually more recommended for the transparency they offer unlike some of the other sources for loans.
In banks, there are a variety of ways to borrow money, from mortgages to personal loans, salary loans, educational loans, device loans, auto loans, construction loans, and other financial products.
Here are a few reasons taking a loan from a bank might be the best option for taking a loan in Nigeria.
Despite being the most common place where loans are sought, there are a few things people have considered as cons, which is;
Peer-to-Peer lending also known as social lending is quite a common practice in Nigeria.
However, it is referred to as AJO. This is a method that enables individuals to borrow money from one another directly without an institutional intermediary like a bank or broker. While it removes the middleman from the process and incurs zero extra costs, it also involves more time, effort, and risk than going through an official financial institution.
In this method, two or more involved either link up via a peer-to-peer online platform or in most cases communicate directly through a group text
Even though they’re not commonly used in Nigeria, credit cards are available in Nigeria. How
they work is simple. When you use a card for a purchase, the credit card merchant pays for you,
kind of like giving you money in advance, until your bill or statement comes.
PROS AND CONS OF USING A CREDIT CARD
1.Typically, there are no extra fees on acquiring a card.
2.Little to no interest on your loans.
3.Great for short-term borrowing
1.Interesting rates can go up to 20% on delayed payments
2.Bad for long-term lending
3.They can escalate penalties to authorities on default.
4.Can ruin your credit score.
NATIONAL CONTRIBUTORY PENSION SCHEME
This is equivalent to Americas 401k is the National Contributory Pension Scheme.
If you need a loan, why not borrow money from yourself? Most plans along with comparable workplace-based retirement accounts, allow employees to withdraw funds in the shape of a loan.
Since your pension fund is for your retirement, meet at least one of the following to take a loan from yourself :
1.You must have made additional or voluntary lump sum contributions into your RSA. It is from that money that you can withdraw before retirement.
2.They also allow you to withdraw up to 25% of your retirement account fund under 50. This holds on to the event of losing your job and you cannot secure another within 4 months. The sum is also tax-free.
3.You intend to get a mortgage loan. RSA allows withdrawal of up to 25% of retirement funds.
It is important to note that asides from these conditions, the Pension Reform Act of 2014 strictly prohibits withdrawal from your pension account.
This depends on your Pension Fund Administrator. Different pension fund administrations have different methods and requirements for releasing funds to you. However, the process requires that you approach your PFA with the following documents:
1.Letter of termination of appointment issued by your former employer or letter of resignation.
2.PFA last three months’ payslip.
3.A letter from you requesting a desired percentage of payment from your RSA balance (25% maximum). This could also be a percentage of your voluntary lump-sum contribution.
4.Evidence of accrued pension rights if applicable (mostly for public sector workers).
5.Letter of introduction from your bank or bank statement.
6.Proof of age through a birth certificate or sworn declaration of age
7.Letter from your employer which confirms full remittance of all contributions made to your RSA (for private-sector workers).
8.PenCom retiree indemnity form if you work in the public sector.
9.A form your PFA would give, and four passport photographs.
You then repay the loan gradually, including both the principal and interest
PROS AND CONS OF BORROWING FROM YOUR RETIREMENT PLAN
1.The interest rate on pension loans is relatively low.
2.Interest doesn’t go to the bank or another commercial lender, it goes to you.
3.No application fees associated with the loan.
Remember, though, just because you’re your borrower doesn’t mean you can be sloppy or lazy with repayments. If you don’t pay on schedule, and the governing body finds out, they could consider you in default and have penalties due on it. Another important, long-term consideration:
If you remove money from your retirement plan, you lose out on the funds compounding, which is borrowing money from your pension is advisably seen as a last resort.
Financing companies, aka finance companies, are outfits dedicated to borrowing money. Unlike banks, finance companies do not accept deposits or provide other financial services or products (safe deposit boxes, credit, cards, etc.). They just routinely make loans to individuals or businesses needing funds. In the case of consumers, they usually provide loans to purchase big-ticket goods or services, such as a car, major appliances, or furniture. Some specialize in medical or healthcare costs.
While some lenders make longer-term loans, most financing companies specialize in short-term loans. Often they are connected to a manufacturer or larger company, serving as their financing arm, so to speak.
PROS AND CONS FROM BORROWING FROM FINANCIAL INSTITUTIONS
1.Financing companies usually offer competitive rates.
2.They often connect the finance company to the retailer or manufacturer whose products you’re buying.
1.They have limited options for loans.
Now that you know all you need to know about all the places you can seek loans in Nigeria, the next step is researching the exact loan you want with the individual merchants.
A financial cooperative is a financial body that is owned and operated by its members. It acts on behalf of a unified group of people while still offering traditional banking services.
It is a more organized version of peer-to-peer lending, and they vary in sizes and form.
Cooperatives usually have open membership, where members are the owners as well the customers. The size of the cooperative depends on the number of members who take part. The more members a cooperative has, the more resources it offers in financial products. Credit unions are an excellent example of a financial cooperative.
Types of cooperative in Nigeria
Primary Cooperative– Operations of primary societies permits its members who live in the same locality and share the same goals and aspirations to go into synergy to achieve their goals collectively.
Secondary cooperative. These cover a more extensive range of operation. It’s formed by the combination of two or more primary cooperative societies with its members and shareholders. They are the union and councils.
Tertiary Cooperative – These consist of both primary and secondary cooperatives.
Industrial Cooperative – This is created by people who have the same craft or employment in common.
PROS AND CONS OF GETTING A LOAN FROM A COOPERATIVE SOCIETY
Most cooperatives are focused on uplifting their members financially.
Loans are granted at a very low interest rate.
You must be a member of the cooperative for a specified period before you can be eligible for a loan.
CLICK HERE to learn more about all the loans available on ALAT.
Due to the news in recent times, we all have to shine our eyes and be alert. We care and we want you to be here with us for a very long time.
Here are some security tips that can help you and your loved one stay safe and alert during these times.
Tell someone Where You’re Going.
Always inform/update someone about where you are going, let someone always be aware of your movements and routine. Going for a date, meeting, hangout, errand, work, interview, to school? Tell someone!
Don’t be an Island
Say hi to your neighbours, security, colleagues and area people! This helps you get word on the street, know what’s going on around your area and Nigeria (you’ll never know what information will save you).
Airtime is Life
Always have airtime on your phone, no amount is too small. If you ever run into trouble, flash airtime can save your life.
Power up your Devices
A reasonably charged phone battery is like a protective weapon; you can call for help, send messages, use social media, send your location, access and block your bank account(s), take pictures and so much more. Leaving your house with a low phone battery is like Captain America going out without his shield.
Doublecheck!!! every invitation and information you receive. Visiting a strange area? Ask around and double-check, Got an interview for a job? Verify the company and the address, Going on a date? Verify the address and the person. Trust nothing, verify everything.
Public places are a safe heaven
Meeting a vendor, buyer, a stranger, having a meeting? always meet in public places, it is safer and there is a “low risk” of insecurity.
Avoid secluded places
Public outings in secluded places are equally risky, meet up in open/busy places, places with people who you can seek help from if Gbese burst.
Check your surroundings
Observe your surroundings at all times, be alert, be observant, trust your instincts and watch the people around you, always check if you’re been followed or watched, a large number of attackers study their victims first. Get help if you feel uneasy, if you are threatened or if you are in trouble.
If you sense you are in danger or you are in harm’s way, protect yourself at all cost. Use pepper spray, your shoes, your hands, your bag, use anything you can get away from your attacker at all cost.
The list is inexhaustible; every day we have stay alert to stay safe and stay alive. Before any security matter escalates from 0-100 shine your eyes and be long gone from it.
Tell us other ways the community can keep safe, share your stories in the comment section and let’s learn from it.
Like, Comment and, Share.
Last Friday, we premiered the first episode of the ALAT Showcase on YouTube where we exhibit ALAT beyond a financial institution.
The ALAT Showcase aims to lead interesting conversations that cut across different spheres. From financial technology to varying lifestyle topics and current trends locally and globally.
In this episode, we featured Ifeanyi Ndiomewese, Chief Operations Officer, Techpoint. Ifeanyi shared his thoughts on the future of banking. He highlighted the role of digitization and collaboration in the future of banking.
Ifeanyi spoke about a lot more in this episode. Who knows? You might find answers to the burning questions you have about the future of digital banking in Nigeria.
This episode welcomes everyone – tech buddies, finance gurus & enthusiasts. As long as you’re Nigerian, or even if you’re not but care about how digital banking in Africa is solving real problems and what the future holds for digital banking, this is an episode you should jump on.
Virtual dollar card mustn’t be one of your ninety-nine problem, ALAT virtual dollar card is back and in this post, we’ll tell you more about it as well as how to verify your NIN on ALAT, and more.
Now you no longer have to go through the strenuous process of dealing with bureau de change marketers and physical banks. You can now spend dollars online without a physical debit card. You can make easy payments on merchant sites like Uber, Netflix, Spotify, Google Play, Apple Music, Asos, Udemy, Coursera, AliExpress, Google, Facebook, etc. with a Virtual Dollar Card.
Here’s how to create your Virtual Dollar Card:
Love is the emotion we all are drawn to. Sometimes it comes in the form of butterflies or smiling at your phone endlessly, and you sometimes can’t tell what this emotion will make you do. In this episode of the ALAT podcast, we explore the most hilarious and over-the-top things people have done for love. Listen here and enjoy.
If your remote work dreams have just come true and you have no clue how to make the most of it, or you’ve been working from home for quite a while and you seem to have gotten too familiar. Read here for tips on how to make the most of remote work in 2021. You’ll also find tips on how to deal with distractions at home here.
We have just rolled out a new feature that allows you to retrieve and verify your National Identification Number (NIN) using the phone number linked to your BVN & ALAT account.
You can enjoy this service at a small fee of N100. You will only be charged for each successful NIN retrieval.
What you do with your money is one of life’s biggest dilemmas. Whether you choose to spend it all, save, or invest, you’ll discover varying levels of risk and potential reward – and how much weight you give to each will depend entirely on your goals. So let ALAT help you to make the right decision for you.
That’s it for this weekend. Oh, and don’t forget to be kind this weekend. You can start by spreading the news. Share this with a friend. Friends don’t let friends miss out on stuff like this. We’ll see you next week.
If you’ve been thinking of the best gift to give your female colleague during the holidays, think no further. Just get her 100 grams of Bone Straight hair and you would have melted her heart. If you have better ideas than a PS5 for your male colleagues, we’d love to hear it.
By the way, please don’t lose sight of the 100 days in January 2021, spend wisely.
2020 has been one heck of a year! But it’s ending finally. In this episode of the ALAT podcast, we talk through the fun and not-so-fun happenings of 2020 and how we lived life all through them. Listen here.
Enjoy a more personalized experience, switch to dark mode to make your screen eye-friendly. you can take a loan to buy new devices and pay later, save alone or with friends, pay in dollars with a virtual dollar card, choose how you spend your money and where your card works, and pocket-friendly offers from brands we know you’ll love.
Last week, Paystack announced her latest and most powerful commerce tool yet – Paystack storefront, a free and complete seller toolkit for selling multiple products online.
In the last few months, Paystack has spoken to numerous African creators and their insights influenced the design and development of Storefront. The result is lots of tiny moves that come together to help you sell more to even more customers.
Storefront is a simple, powerful tool that will help you sell all your products online for free, increase sales with Gift Orders, chat with customers on WhatsApp while they’re on your seller page, set smart inventory management rules, customize your seller page, and so much more!
The pandemic has accelerated some trends, killed others, and created some weird situations for businesses as they’ve had to adapt.
Cheesecake Factory, for example, started the ‘we’re not paying rent’ trend. Though the first business to refuse to pay rent was Cheesecake Factory, many others followed – including Staples and Petco. Though some of these businesses are still locked in lawsuits, it was fairly unprecedented and there weren’t many landlords that could immediately do it.
Twitter let its employees work from home, forever. During the pandemic, sentiment towards working from home has generally turned – and many businesses have acknowledged their employees can continue when things are back to normal.
There are more examples in the 101 most momentous business moves of the pandemic full post if you’re interested in seeing more momentous pandemic business moves.
It’s been an interesting 11 months, and before you get lost in the flurry of other activities this weekend, take a moment to think of how many life lessons this year has taught you.
David Perrell has listed 43 different lessons you can learn from 43 different fields. Here are some of the most interesting ones:
Remember, sharing is caring and rewarding. Be kind this weekend. You can start by spreading the news. Share this with a friend. Friends don’t let friends miss out on stuff like this. We’ll see you next week.
Delicious seafood dishes, amazing cocktails and more. Get a 10% discount at The Alley Restaurant in Victoria Island when you pay with your ALAT debit card.
Never be in the dark again. Get 5% off Simba inverters, UPS and backup batteries when you pay with your ALAT debit card at any Simba outlet.
Refresh at Oriki Spa and get a 10% discount when you pay with your ALAT debit card.
Upgrade your wardrobe with clothes, shoes and accessories from any Twice As Nice outlet and get a 10% discount when you pay with your ALAT debit card.
Get relief from stress for up to half price at Dmoon Spa, Lekki Phase 1 when you pay with your ALAT debit card.
Suites at Radisson Blu hotels are 50% off on weekends when you pay with your ALAT debit card. You can also use the hotel spa for 10% less.
Clean clothes for less! Get a 20% discount on washing and drying at all ezWash Laundromats when you pay with your ALAT debit card.
Need sleek-looking casual or athletic shoes? Head to any Skechers store and get a 10% discount on shoes when you pay with your ALAT debit card.
Pay with your ALAT debit card at the lovely Fahrenheit Loft Hotel, Victoria Island and get a 25% discount on all rooms at rack rate.
What’s better than fast food? Fast food at a discount. Your ALAT debit card gets you 15% off everything at Burg, Ikeja.
Sign up for two months of gym access at Fitness Central, Lekki and get a 20% discount when you pay with your ALAT debit card.
Enjoy meals and drinks at The Eve Restaurant, Victoria Island with a 10% reduction on your bill when you pay with your ALAT debit card.
Eat Nigerian at Natives Restaurant, Victoria Island and pay with your ALAT debit card to get a 10% discount.
Have a blast with friends! Go paintballing at Ultimate Arena, Magodo and get 20% off when you pay with your ALAT debit card.
Get 5% off cocktails at SOUTH Eatery & Social House, Victoria Island when you pay with your ALAT debit card.
Enjoy nights out with a 10% discount at Cubana Lagos every time you pay with your ALAT debit card.
Better than cash! Get 10% off your bill at 355 Bar & Restaurant, Victoria Island when you pay with your ALAT debit card.
Club nights can be expensive nights. Cut the cost with a 10% slash on your bill at Escape Nightlife, Victoria Island when you pay with your ALAT debit card.