How to Plan and Save for Your House Rent in Nigeria
House rent is one of the top items bugging a lot of adults in every country, even in Nigeria. In Nigeria, there are over 85 percent of Nigeria’s urban population living in rented accommodation. And they spend over 40 percent of their income on rent.
Planning and saving for your house rent, especially in Nigeria where the economy is quickly becoming a jumpscare, can be tasking. That’s why we have crafted this article to help you plan and save for your house rent properly and effectively.
We are going to be breaking down this article into two parts: “How to plan” and “How to save” for your house rent, so we can offer a more tailored guide on how you can achieve planning and saving for your house rent.
How To Plan For Your House Rent
- Understand Your Rent Terms
The first thing you should do is study your rent terms. This includes knowing your payment structure (when you should pay your rent e.g. daily, weekly, monthly, annually, or bi-annually). You also need to know the particular day your rent is due so you don’t have an angry landlord at your door.
- Determine Your Budget
This should have been the first deciding factor when looking for a house to rent, but here we are. Follow the 30% rule to properly set aside a budget for your house rent.
The 30% rule means you shouldn’t spend more than 30% of your income on rent. If you spend more than 30% of your income on rent it means you are living above your means. For instance, if your house rent is 400,000 naira annually and you earn 2.4 million naira annually (200,000 naira monthly), your house rent budget should be 720,000 naira.
The above calculation shows that you can comfortably live in a house that costs 400,000 naira annually. If you score lower than your house rent using the 30% rule, you should consider moving to a cheaper house.
Remember, we didn’t even factor in additional costs like service charges, utility bills, and maintenance fees. These additional costs can quickly raise your spending in a twinkle of an eye.
- Assess Your Current Financial Situation
Knowing if your income streams are sustainable and capable of raising your house rent is something you should consider. This will help you know if you need to take up more jobs, find a better-paying job, expand your business, or double your hustle.
- Create a Rent Payment Timeline
Split the total of your house rent cost into bits (weekly or monthly) and draw a savings timeline to save up the total.
For instance, if your house rent costs 400,000 naira annually, you can choose to draw up a savings timeline for 10 months. This means you’ll have to save 40,000 naira per month.
You can also replicate this for a weekly or bi-weekly savings timeline.
- Communicate with Your Landlord
If for any reason you can’t seem to work according to your house rent payment plan, you’ll have to discuss flexible payment terms with your landlord.
Maybe you can discuss with your landlord to pay in installments (weekly or monthly). By default, house rent is mainly paid annually in Nigeria. Unfortunately, most landlords won’t agree to receive payments any more than per year.
How to Save for Your House Rent
1. Set Up a Dedicated Rent Savings Account
Setting up an account just for saving your house rent is a good place to start. Many Fintech out there offer dedicated saving plans that can help you save money. A good example is our Space Rent savings plan.
One amazing perk the Space Rent savings feature has is the automatic deposit which automatically deducts money from your bank account to ensure consistent saving.
And you can’t withdraw your savings at random times. You can only withdraw once a month or wait until the platform automatically pays your house rent to your landlord when your saving goals have been met.
If your savings goal wasn’t met, you stand a chance to request a loan of up to 30% to complete your house rent.
2. Cut Down on Non-Essential Expenses
It’s shocking how much we spend on a daily and weekly basis on unnecessary things. Taking note of your monthly expenses and cutting down on unnecessary spending can help you quickly generate funds for your house rent.
Think twice before you make any spending decisions. Do you need that new phone now? Are you sure you need a new set of jewelry? Do you have to eat in that fancy restaurant right now?
3. Prioritize Rent Over Other Savings
Prioritizing saving for your house rent should be non-negotiable. You should put it over your vacation, shopping, or subscription budgets. Opting for budget-friendly alternatives will help you save money.
We understand that you also need to save for emergencies and all. But don’t you think that your house rent is an emergency too? Imagine being thrown out of your house just because you couldn’t pay your house rent on time.
Pause every less urgent saving goal you have going on and reallocate that money to your house rent saving plan. You can start saving for other things when you’re done saving for your house rent for the year.
Final Words
Planning and saving for your house rent in Nigeria can be tasking considering how bad the economy has been lately. But taking advantage of the information in this article will definitely help you up your house rent-saving game.
Remember, the goal is to balance saving for rent and living your best life. To achieve that, rent a house that you can comfortably afford, draw a proper budget with only essentials, create a comfortable savings timeline, and cut down on unnecessary spending.
You can also take advantage of the Space Rent saving plan to save for your house rent and earn up to 30% loan if you can’t meet your saving goal.