As we close out 2024, discover essential money moves to boost your financial standing in Q4. From high-yield savings accounts to leveraging debt wisely, get ready to finish the year strong.
Am I the only one sick of this year already? It’s only just October, but I want it over, PRONTO. I know “I’m not the only one….”
But I spoke to a friend recently, and she had a few insightful words about this feeling. According to her, it’s really more about having clocked out of the year’s stress, and that’s why everything feels overwhelming. Her solution? Give yourself something to look forward to.
As we take on the final stretch of 2024, it’s easy to feel like the year is winding down, and there’s little left to accomplish. However, Q4 is ripe with opportunities to make impactful financial decisions.
Instead of slowing down, this is your moment to sprint ahead. Whether your year has gone as planned or you want to salvage it with some last-minute wins, several savvy money moves can set you up for a prosperous new year.
Why don’t we have a look at some?
Take Advantage of High-Yield Savings Accounts
One of the best money moves or strategies for maximizing your savings is to set up a high-yield savings account (HYSA). HYSAs offer significantly higher interest rates than traditional savings accounts do, which means your money grows faster.
Understanding High-Yield Savings Accounts
High-yield savings accounts are designed to reward savers with better returns. While traditional banks may offer an annual percentage yield (APY) of around 2-3%, HYSAs can provide rates exceeding 5%, with some even reaching up to 10%. We already know saving doesn’t put you in the top 1% exactly, but this one is savings on steroids and would get you places faster.
- Compound Interest: The magic of HYSAs lies in compound interest. For instance, if you deposit 100,000 naira into an account with a 10% APY compounded monthly, you’ll have approximately 110,000 naira after one month. The next month, interest is calculated on that new total—accelerating your growth exponentially.
- Accessibility and Security: Although these accounts may limit withdrawals and transfers, they often come with features like debit cards for emergencies. This balance between earning potential and access makes HYSAs an excellent choice for savers looking for financial security without sacrificing flexibility.
Choosing the Right High-Yield Savings Account
Not all HYSAs are created equal. Here are the factors you should consider when choosing one for your money moves strategy:
- Interest Rates: Look for accounts with the highest rates available. Rates are significantly different from one institution to another, so it pays to shop around. You’d typically find the top yields ranging from 5% to over 10%.
- Fees: Some accounts charge monthly maintenance fees or fees for exceeding transaction limits. Opt for accounts that minimize or eliminate these costs. Also, beware of any penalties for early closure.
- Minimum Balance Requirements: Most HYSAs require a minimum balance to earn the advertised rates. Make sure you can consistently maintain that balance, usually around 100,000 naira.
- Accessibility: Check if you can easily transfer or withdraw funds digitally.
Top High-Yield Savings Accounts in Nigeria
Of course, we wouldn’t leave you hanging. Here are some standout options for high-yield savings accounts:
- Fidelity Bank HYSA: Offers 8.225% to 8.675% per annum on balances above ₦100,000 and 8.025% p.a for balances below N100,000 with no opening balance requirements or monthly fees. You can even use your savings as collateral for loans.
- Stanbic IBTC Max Yield Savings Account: This account offers tiered rates, with a 10% MPR per annum interest rate if the balance is less than N100,000 and a 0.5% bonus interest plus the 10% MPR interest rate when the daily balance is more than ₦100,000.
- Access Bank HIDA: Consistent 8.25% to 9% interest rate on deposits above 100,000 naira (10% p.a. for ₦250 million and above). Offers 8.175% interest p.a for deposits less than ₦100,000.
- UBA Target Account: Great if you’re looking at deposits below ₦100,000 (4.20% p.a). Tiered rates from 4.50% to 5.50% for balances from ₦100,000 to ₦250 million and above.
- ALAT by Wema: Fully online account offering 8.75% interest per year on deposits over 5,000 naira with no opening or maintenance fees.
- Keystone Bank HISA: Provides tiered interest rates based on your deposit amount. HISA Band A (deposits between 10,000,000 and 19,999,999 naira) offers the CBN recommended interest rate plus an additional 1.35%. Band B (For deposits between 5,000,000 and 9,999,999 naira) offers the recommended rate plus 0.85%. Band C (deposits between 500,000 and 4,999,999 naira) offers the recommended rate plus 0.60%.
There’s more. Who doesn’t love a good ol’ fashion alternative? In addition to traditional banks, consider using savings apps. If the traditional HYSAs are to be considered on savings on steroids, then these are the Savings Superman:
- FairMoney: Offers two great wallets—FairSave (13% daily interest) and FairLock (up to 28% p.a).
- Piggyvest: Popular for its flexible savings plans and interest rates from 12%-17%.
- Cowrywise: Provides various saving options and offers interest rates up to 14%.
- Kuda Bank: A digital bank with flexible savings options and rates up to 15%.
There you have it- the first part to making smart money moves. Let’s jump to the next.
Be Mindful of Seasonality
‘Tis the season to be jolly, we know, and while we all love the festive spirit of the Ember months, it’s important to pump the brakes just a bit and consider how this period can impact your finances.
As the holidays approach, spending tends to go up, and our usual financial routines can get a little chaotic. Here are a couple of money moves to help you navigate this festive but financially tricky time:
Set Conservative Earning Targets
If you run a business, think of this run till December as a half-month for revenue expectations. If you usually aim for ₦500,000 in revenue, adjust that to ₦250,000. This approach reduces the pressure on you/ your team and allows for better cash management during the unpredictable holiday season. While everyone is busy buying gifts and celebrating, your revenue might dip. A conservative target provides a buffer against unexpected fluctuations.
This season might also mean potential bonuses or year-end raises for salary earners. Instead of counting on those additional funds, consider your usual take-home pay as your baseline for budgeting. If you usually take home ₦150,000 a month, plan your expenses around that amount rather than assuming a bonus will cover any extra holiday spending. As a popular street slang puts it— sojunu (throw your eyes away from potential money, literally).
Revise Your Budget
No matter your employment status, the Ember months are the perfect time to review what your spending habits have been like this year. Identify areas where you can make adjustments without overspending during the holidays.
As a business owner, let’s assume you typically spend ₦100,000 on some of your overhead costs like marketing ads. A great step would be to assess which campaigns are performing well and which are not. Perhaps consider reducing that budget by 20% and reallocating those funds to more effective strategies. This can help maintain your cash flow while still capitalizing on holiday opportunities.
On the salary front, look at your typical monthly expenses. If you usually spend ₦50,000 on leisure activities, consider scaling back a bit. Maybe plan fewer outings or opt for less expensive entertainment options. For example, try hosting a potluck at home instead of dining out for every holiday celebration. This way, you can still enjoy the festivities without straining your budget.
A little planning can go a long way in ensuring that you kick off the new year without a financial hangover!
Use Debt as a Tool for Growth
This is always tricky advice, and I get it— nobody typically likes the idea of debt. Usually, who’d want to owe? Not you!
Debt often gets a bad rap, but if managed correctly, it can be a very useful tool for growth. Financial educator Dutch Mendenhall suggests reframing your mindset around debt. Instead of viewing it solely as a burden, think of how it can be leveraged for investments. This shift in thinking allows you to use borrowed funds to create opportunities for wealth-building rather than just focusing on paying it off.
For example, you might decide to invest part of a debt in a workshop on e-commerce strategies, which can help you pivot your business model to tap into the online market. There’s also borrowing to invest in high-quality machinery that might streamline production, allowing you to increase output and revenue. You could also enroll in online courses or certifications relevant to your field. Imagine taking a product management course that could help you move from what you currently earn ₦200,000 to something higher. Investing in your skills can have more than one way of paying off.
Getting a credit facility that would help you invest in opportunities you may not be buoyant enough to get at the time is also not a bad idea. You have no idea how many folks miss out on great, life-changing opportunities in stocks or crypto simply because they don’t have the funds. Don’t let that be. Just make sure it’s worth it, though.
Conduct a Financial Reset for Q4
It’s always a good idea to look back (except you’re Lot’s Wife, in which case you absolutely should not). With the end of Q3, it’s time for a financial check-up. To make the right money moves, ask yourself these key questions:
- Did I achieve my goals? Reflect on whether you met your financial objectives for the year. If not, consider setting specific, achievable goals for Q4.
- How have I fared with my finances? Evaluate your spending, saving, and investment habits. Identify any areas where you can improve.
- Did I make, manage, and multiply my money well? Assess your performance in these three areas. This Make-Managing-Multiply Strategy framework helps you identify which aspect needs the most attention as you move forward:
- Have I found ways to increase my income?
- Am I managing my expenses effectively?
- Have I invested wisely?
- What areas can I improve? Continuous improvement is essential in finance. Pinpoint specific actions you can take in Q4 to enhance your financial health.
- Am I ready for the power quarter? Q4 can bring unexpected opportunities. Stay open to new projects, partnerships, or investments that could enhance your financial situation.
❗Fair warning: I’ve tried some of these (esp. number 2), and let me tell you, it’s best to do it sitting down. But, once you’re over the initial shock, it’s actually a great way to know where you need to fix up or where to pat yourself on the back.
Set Specific Goals for Q4
Whether you’ve hit your targets or are looking to improve, setting small, specific goals for the final quarter can make a big difference. These goals don’t have to be monumental.
They could be as simple as increasing your monthly savings by a certain percentage or exploring a new investment opportunity. Do this from now till December, and you’ll see the difference!
Bottom Line: Finish Strong in 2024
As we transition into the last lap of the year, remember that there’s still immense potential ahead. You can still finish the year on a high note with the right strategies and a proactive mindset.
Are you ready to make the most of what’s left of 2024? Start implementing these money moves today, and sign off on a high!
Cheers!
Dami from SimplVest 🚀
