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The first thing most people learn about money management in a typical African household is how to save. But in today’s Nigeria, saving for a rainy day can be hard when it feels like it’s always raining. For many Nigerians, saving is just a means to an end — to buy a new phone, laptop or wig. Sometimes, it’s simply moving money to a Cowrywise account you’ll later spend when your Opay balance hits zero. 

But good saving habits as a ten-year-old with a piggy bank are not the same as good saving habits as an adult. 

According to Ramat, an accountant with a diverse investment portfolio, “the worst thing you can do with your money is to save it.” Here’s why:

There’s a difference between savings and an emergency fund

Keeping money in a bank account without a clear purpose makes it easier to spend. There will always be an emergency that will justify dipping your hand into your savings; a friend’s emergency, an asoebi for a wedding you ‘must attend’, or your wig sale you can’t resist. Before you know it, you’re constantly withdrawing and replacing the same amount, with no real growth. 


An emergency fund, on the other hand, is money set aside to keep you afloat when life happens, your laptop screen breaks, you lose your job, or rent is due. Ideally, your emergency fund should cover about three months of expenses. It’s okay to build this gradually by setting a fixed amount aside monthly.

The worst thing you can do with savings is to leave it dormant

According to Ramat, the figure you can see in your bank account is just a collection of numbers; the money isn’t present in your bank account. The bank is already investing that money on your behalf. Thanks to inflation, what ₦100,000 can buy today won’t be what it can buy next month. So, while your balance looks the same, it value is quietly shrinking. 

You can multiply your savings with as low as #1000

The good news is that you don’t need millions to make your money work for you. Even ₦1,000 can begin your journey toward earning passive income.. Ramat broke this down when she said, “I don’t have up to ₦100,000 in my savings account, but the MTN stocks I bought six months ago made twice the amount I invested when it was time to collect”.  

 Yes, putting your money in a money market, buying real estate or gold are good ways to save money that’ll make more for you in the long run but when you earn 150k and land in Ikoyi is 200m, the 20k you have to spare is better spent buying shares at a real estate company on the rise than saving to buy real estate in the future.   

Ask a Professional for Advice 

Still, choosing the right platform to invest your money can be very tricky. If you can afford to, hire a wealth manager to manage your investment portfolio, but if you can’t, with the right knowledge, you can do it yourself. 

Taking a calculated risk with your savings is different from buying random stocks

Even with good advice, not every investment is worth your money. Nigerian stocks are volatile. They decrease sometimes without a reasonable explanation. If you can afford to, it’s best to buy stocks in international companies with more stable economies, but many Nigerian companies are currently doing very well. 

Ramat says before you buy stocks, remember to always check the price of the stock from a reliable source, check the company’s financials, growth rate and economic news that can make their stocks increase or decrease. 

There are real risks to buying stocks. To illustrate this, Ramat said,  “Some days ago, I wanted to buy Netflix stock because I read that they’ve released their report and are expecting strong earnings. As of yesterday, Netflix’s stock dipped by 80% because of an issue they have in Brazil.”

Finally, diversify your stocks instead of investing all of your money in one company so that you won’t lose too much if it crashes. 

Don’t be in a Hurry to Cash Out 

When your investment yields profit, don’t rush to withdraw it. Reinvesting makes your money grow faster by acquiring compound interest, which simply means earning interest on both your initial money and the profit it’s already made. If you’re using apps like Cowrywise, Bamboo, or Piggyvest to invest, turn on the auto-reinvest option. That way, your interest goes straight back into your investment portfolio instead of your main account, where it’s easy to spend.

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