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All you need to know about target saving plans, specifically an education plan

How can you save to meet a predefined target in the future? For example, if you want to save to hit a future target sum for the education of your child, how can you implement a target Saving Plan?



All you need to know about target saving plans, specifically an education plan, 7 ways to save money after payday 

How can you save to meet a predefined target in the future? For example, if you want to save to hit a future target sum for the education of your child, how can you implement a target Saving Plan? There is a step by step process for this.

Imagine this Scenario

The Makinde family (Makinde and Ijeoma) have a daughter named Hawa aged 5 years old. They plan to send Hawa to University when she is 18. Therefore, they want to begin saving in order to ensure they are able to fund this project.

To save for a child’s education, the steps are as follows:

  • Determine the investment tenor
  • Determine the current cost of the project, (in this case education)
  • Calculate a rate of growth in the cost of the project is education cost over estimated investment tenor
  • Agree plan to meet the target amount

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1. Determine the investment horizon

Hawa is aged 5 and will pay her tuition to the university when she is 18 years. Thus, we have an investment horizon of 13 years to work with (18 yrs. minus 5 years). In other words, the investment tenor will terminate in 13 years.

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2. Determine the current cost of the project (education)

This is simple enough. Select target school, determine their cost of tuition, lodging, etc. The Makinde’s want their daughter to attend the University of Nigeria Nsukka. Advised costs as at today are N100,000 a year for accommodation, and N200,000 for tuition plus N50,000 for textbooks. Every year, the total cost would amount toN350,000. Assuming She wants to become an Engineer, that’s 5 years in school; making the total cost N1,750,000.00.

Please note costs are for illustrative purposes. When calculating the cost, be clear on whether costs are set or will go up automatically by a multiplier.

Let’s assume that this pretty girl is Hawa whom we have a target plan to save towards her university education…

[READ THIS: How to calculate deduction for employee compensation scheme]

3. Calculate the rate of growth on the current cost of education

The next thing is to project how much that current cost figure will grow over the next 13 years due to inflation or even administrative price increases. This is the tricky part because we cannot be completely certain about the direction of inflation rates in 13 years. So, we project a series of estimated price hikes due to inflation. Specifically, we build scenarios to forecast how different inflation rates will affect our result.

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A scenario is a necessary risk management process to adopt towards ensuring that we have the optimistic picture (with low inflation) and a pessimistic scenario (with higher inflation)

We can assume, for illustrative purposes, that the cost (inflation) today will rise with the optimistic scenario, ie the cost will grow by 2% every year, using this assumption, the total sum due in 13 years will be N2.2 million.

This N2.2 million becomes the target amount required to pay Hawa’s tuition in the university. It is simply the Future Value of N1.75 million growing at 2% for 13 years. So assuming we agree the rate of school fees will go up by 2% every year for 13 years, we need to have N2.2 million in our education account in 13 years.

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4. Agree plan to meet Target amount

If we divide N2.2 million for 13 years, we get N169,230 per year or N14,102 every month. This is what goes into our budget, in the Non-Discretionary part of the budget. Non Discretionary meaning we are committed to saving this amount before we spend on Discretionary expenses like holidays. The key point is that we are funding an amount that has been inflation-adjusted.

The contributions should be invested in an instrument that is safe but beats inflation projected rate of 2%. The first objective here is safety. Even if we buy equity, we must wind down those equity positions as the fund nears the 13 years period.

Open a dedicated account for this. Be consistent, set up a standing order debit arrangement where your debits are swept into a dedicated account, they invested to compound

It’s very important that every year you review your plan, ask the school the current school fees and adjust your plan so that your contributions are well ahead of inflation. What happens if inflation goes up? This means we go back to our scenario and increase the cost of the Future Value Calculation. This will translate to more deductions going from Income to the Non-discretionary Budget

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Lots of maths? Yes indeed. But the good news is that there are lots of online Future Value calculators that can do this for you. This means as parents all you focus on is getting the correct variable to key into the scenarios. If you understate inflation, your plan will be skewed off.

It’s also important that before you commerce your plan you speak to your financial adviser or banker and ensure you agree jointly a plan.

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Retirement Savings Account

Question: Retirement v Child education

If you had only N100,000 and two choices (either child’s education or retirement contribution), which should you choose? Pick the Retirement. Why?


Your retirement fund is perhaps your most important investment fund. During retirement, the income earned is mostly passive income (income earned without actively being at work). So, take every opportunity to make sure you contribute to a retirement plan and allow your contributions compound an ear and great fund before investing for your child’s education…

Financial Jargon: What is the TSA?

TSA means Treasury Single Account, its an account that collects all of the Government’s accounts under one “manager”. The point of TSA is that the Government can determine how much it has cumulatively in all its accounts and as such, be able to better manage its cashflow. The TSA improves transparency and increases efficiency in the management of public funds

You can also set up your own family TSA, track and funnel all income to one single account and then make payments from that account based off your budget

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How to register for FG’s N75 billion MSME survival funds

FG released guidelines to access the N75 billion MSME Survival Fund.



MSME, How to register for FG's N75 billion MSME survival funds, Small Businesses in Nigeria

The Federal Government (FG) has released the guidelines to access the N75 billion Micro, Small and Medium Enterprises (MSME) Survival Fund and Support Initiatives, which took effect from September 21, 2020.

The scheme, which is the core of the N2.3 trillion stimulus package of the Nigerian Economic Sustainability Plan includes the N60 billion MSMEs Survival Fund and the N15 billion Guaranteed Offtake Schemes.

This disclosure was made in an official statement by the Federal Government through a series of tweet posts on its official Twitter handle.

READ: FG to provide financial support for 1.7 million businesses, individuals in next 3 months

The statement from FG read, “As the portal for the registration of prospective beneficiaries of Survival Fund opens, interested Nigerians in the Payroll Support Scheme are to note that the site will be open from 10 pm Monday, September 21, 2020.”

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The statement says that the registration for the payroll support will start with the educational institutions at 10 pm Monday, September 21, 2020, and will be followed by businesses in the hospitality industry by 12am Friday, September 25, 2020.

The portal will also open for other categories of small businesses from 12am, Monday, September 28, 2020. It should be noted that the scheduling of the registration for prospective beneficiaries is to ensure that the process is seamless and hitch-free. The registration of every sector is to continue until Thursday, October 15, 2020.

READ: FG to save N1 trillion annually from petrol subsidy removal

To register for this initiative, the Federal Government has also provided a portal for entry. Potential beneficiaries are advised to log on to to complete their registration.

As part of the registration process, the beneficiaries are expected to provide personal registration details, activate their account, register their organization after they have successfully activated their account.

Corporate Affairs Commission (CAC) Number, Bank Verification Number (BVN), SMEDAN Number, a Tax ID (optional) and the organization’s bank account details will be needed.

Completing the Payroll Support Registration, beneficiaries’ first name, last name, email, mobile number and Password will be required. Also, their Date of Birth, residential address and residential Local Government Area will also be provided.

READ: FG releases new details on MSMEs support scheme, budgets N200 billion for loans

These 2 MSMEs initiatives namely MSMEs Survival Fund with payroll support track and the Guaranteed Offtake Scheme were introduced by the FG as part of the efforts to support businesses overcome challenges posed by the Covid-19 pandemic.

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The MSMEs Survival Fund scheme is a conditional grant to support vulnerable micro and small enterprises in meeting their payroll obligations and safeguard jobs in the MSMEs sector. The scheme is expected to save at least 1.3 million jobs across the country and specifically impact on over 35,000 individuals per state.

READ: Nigeria’s external reserves up by 7% in 21 days, currency speculators to lose over N10 billion 

The scheme will be implemented over an initial period of 3 months and is targeted at employees of MSMEs and self-employed individuals with 45% for female business participation and 5% for special needs participation

The Guaranteed Off Take Stimulus Scheme is expected to perfect and sustain the income of vulnerable micro and small enterprises from the economic disruptions of the Covid-19 pandemic through the implementation of various initiatives aimed at boosting the production capacities of small businesses as well as the provision of grants.

The duration is also for an initial period of 3 months and is targeted at micro and small businesses registered in Nigeria.


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Personal Finance

Up for a raise? Use these 5 strategies to make it happen

To avoid appearing selfish or materialistic, here are five strategies to employ when demanding a raise.



Investment options for salary earners - bank loan

Requesting a raise is an important conversation that you should have with your employer, particularly if you believe your salary does not measure up with the value you bring to the company or the duties for which you are assigned.

In a bid to avoid appearing selfish or materialistic, many people shy away from this. They continue to expect the day the company will announce a raise or promotion for the employees. Although in some workplaces this sometimes plays out as expected, many other businesses seldom revisit the salary specifics and performance evaluation document of their employee to evaluate and conduct a correlation in order to make recommendations for a raise to those who merit it.

Demanding a raise does not entail asking for a favor from the company, it simply means asking for suitable market value for your job roles and responsibilities. In as much as this might be the right of an employee, it is necessary to know how to go about it appropriately in order to achieve a favorable outcome.

Here are five strategies to employ when demanding a raise:

1.  Evaluate your contributions and performance

To ask for a raise, you need to have a well-grounded knowledge of the positive contributions you have made to the company. Create a list or record of your discharge obligations or duties, as well as significant achievements that you made on the job. This will give you insight as to the value you bring to the company and what you get in return. Evaluating your results will provide you with a sound understanding of your efforts, achievements, and will also increase your confidence to demand a pay raise. This will help your boss realize that you know your worth.

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(READ MORE:Banks push customers towards self service in the “new normal”)

2.  Boost your negotiation power

Negotiation is the process of reaching a fair agreement for the parties involved by means of meaningful conversations. Most employees cower in the face of salary negotiation because of the impression this may create about them to their employers. Others who are brave enough to take the step lack the skillfulness to achieve or reach a handy result.

Negotiation is an art that should be learnt. Employees should improve on their negotiation skills if they intend to get a fair bargain for their efforts. One of the negotiation techniques that can be incorporated when asking for a raise in pay is to layout specific options from which the employer is to choose. This will offer both parties substantial choices to make a decision from.

3.  Right timing matters

There is a time for everything. As cliché as this may sound, it is a fact you should accept and work with. You have to assess the company’s financial position to ascertain if asking for a raise will be feasible. When this is done, you can proceed to arrange a meeting to discuss it with your employer. Find out from your employer when it is convenient to discuss issues of concern that you have.

4.  Present cogent reasons

When demanding a raise, one of the strategies to achieve this is to tender reports or proof of your achievements or efforts that have contributed to the development of the company in some way. You can request for a raise on the grounds of the length of service, duties, or performance. Your motives should reflect the principles of the company and they should be objectively stated.

(READ MORE: Nigerians will now pay N50 stamp duty on electronic receipts – FIRS)

5.  Express gratitude

Appreciate the employer for the ability to work for the company and show a sense of appreciation for their service. Let the employer know that your demand for a raise does not mean that you are dissatisfied with the employer or the work, but rather that it is a request for what suits the specified roles you play.

For a variety of reasons, many organizations give an employee a raise based on different factors that range from efficiency, motivation, length of service, promotion, and a few other factors. If you are assured that you have fulfilled the requirements for a raise, the methods mentioned can be used to improve the chances of having a raise.

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Personal Finance

Personal Finance Culture: The 4 Cs of Financial Success 

To achieve financial success, the 4Cs will be of great help.



Borrowing money, Personal Finance Culture: The 4 C’s of Financial Success 

Many Nigerians who had a pseudo-confidence in their financial stability, were rocked by the storms of the economic hardship that followed the COVID-19 pandemicSome did not survive it, while those who did, now seek ways to be better financially equipped for future eventualities. 

It’s six (6) months since the COVID-19 outbreak was officially declared a global pandemic by the World Health  Organization (WHO) on March 11th, 2020With the full enormity of the pandemic in mind, we cannot come out of this without noting its attendant life lessons. Interestingly, some of those lessons correlate with principles that can enhance your personal financeon your journey to financial freedom.  

READ: Emirates Airlines banned from operating in Nigeria

Financial freedom does not happen overnight, as it results from self-discipline and good money habits practised consistently over time. 

To help you on your journey, I have come up with the 4Cs. To achieve financial success, you must be; 

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  1. Creative – Find creative ways to earn more money. Having more than one source of income is a good way to increase your financial security. I’m sure the people who lost their jobs or took a pay cut during the pandemic will agree with me.
  2. Conservative – Be conservative with your expenses, and make sure to spend less than you earn. You can actually save more if you stick to a budget. It is okay to occasionally reward yourselfand enjoy the finer things of life. But that should also be on budget. 
  3. Consistent – Form the habit of saving and investing part of your income. As far as savings go, you need to have at least 3 months’ worth of living expenses, stashed away in liquid assets – Emergency funding, to cushion the impact of job loss, unplanned medical expenses, and other emergencies. It also applies to small businesses – many SMEs without any financial buffer felt the impact of the lockdown from Day 1. Investing, on the other hand, is the only way you can grow your money. You should take it seriously; develop the right mindset, become financially intelligent, and seek expert advice before taking a step. 
  4. Careful – Be careful who you listen to. Not every investment advice is good for you, and you should do your due diligence before releasing your money. 

READ: Effective financial planning after taking a pay cut in Nigeria

So, will you be making any changes to your money management style? What did you wish you learnt about money pre-COVID-19? 

Importantly, we are not out of the woods yet. The virus is still out there, and you should stay safe, as Health is Wealth. 


 Temitope Busari, CFA 

Temitope is an Investment Professional, with over 11 years of cognate experience spanning regional financial markets across Sub-Saharan Africa. Her technical skills cut across Treasury, Risk management, Fintech solutions, and Strategy. With a passion for positive social impact, she leverages multiple media platforms to advance financial literacy efforts, helping individuals and small businesses make better money decisions. 

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