Small businesses, freelancers, and solopreneurs are faced with the daily challenge of lower purchasing power as Nigeria continually records inflation on a daily basis. In August 2023, the dollar sold at $870, and three months later, it was at $1200. In addition to the Naira’s fall is the fuel subsidy removal, a double blow to the purchasing power of Nigerians as the cost of locally produced items soar high due to an increase in production and logistics cost.
The cost of doing business has also gone up, but unfortunately designers won’t get to charge their clients in relation to inflation trends; client’s continually expect last year’s price regardless of the situation on ground.
There are several methods suggested to solve the inflation which for designers revolve around making more money but there’s a hidden aspect to this story no one is telling you, and that’s this: the solution to inflation is not just a salary increase or a rise in earnings but rather a mindset shift to help you protect your purchasing power.
In this article, we cover new things you can do to make your money do more for you in the face of a inflation and live a better life as a result.
1. Earn in FX
The dollar rose by 54.2% in the space of four months from June to October this year and experts say it’s likely to continue it’s upward trend. Now, for freelance designers or agency designers, a salary increase rarely happens at 45% bi-quarterly. Meaning, if your current earnings increase by over 50%, rising inflation would still gulp this up.
A safe way to counter this is to earn in a competitive currency, like the dollar or some other currency, stronger than the Naira to give you an edge over local inflation.
Earning in a foreign currency enables you to earn at a stable value and can be useful for designers who work across countries and utilize foreign currencies for payment. It also means the opportunity to work with international clients, offering more exposure and creative discipline.
Here are five sites you can start searching for foreign design jobs and gigs now.
2. Relocate, Relocate, Relocate
The cost of living largely depends on geographical location i.e some places cost more to live in than others. A look at pricing research already shows that the cost of accommodation in suburban Lagos state is more expensive than not too far away Ibadan This region is also cheaper in other areas such as utilities, and transportation.
Working remotely and living in an expensive area? consider relocating to cheaper states in the country. Discuss with friends and family living outside the state to gain perspectives into the cost of living in their respective locations and compare these with yours. You will be surprised to note the substantial amount you can save by simply relocating and the better living awaiting you in places where things cost less.
Here are the five cheapest places to live in Nigeria.
- Ibadan, Oyo State
- Abia State
- Kaduna
- Kano
- Plateau State
3. Remote Working
Working in jobs requiring a daily commute is arguably the number one drain on your earnings, as transport costs have risen by a 100% since the subsidy removal.
Remote working, however, offers an option to skip these costs and commit to saving on transport-related expenses. This not only saves you money but increases productivity as you repurpose time used for commuting to working hours.
If you have a job that requires a daily commute, consider negotiating with your employer if possible or seeking jobs with remote working as an option.
Here are five job sites in Nigeria with remote working options available.
4. Avoid the Extravagance
Improvements in technology can come with the tendencies to enable you spend more as the hurdles in purchasing items are removed.
There are for instance, food apps to make orders a breeze, loan apps for borrowing, and entertainment subscriptions around every corner of the internet.
However, in an economy where income is increasingly endangered, designers could do well to avoid spending trends regardless of their convenience. If it doesn’t contribute to your bottom line, is just a convenient add-on and not a necessity then avoiding this habit will in the long run improve how much you have to spend or help you save more.
Moreover many expenditures encouraged by technology can be replaced by traditional methods, such as cooking at home, which cost less.
5. Track Your Spending
Accounting for how we spend is a task that many would rather avoid, as it’s seen as unpleasant, taxing, and sometimes not crucial to how much you make. However, accounting for how you spend gives an informed outlook on the areas your money goes into and allows you assess which of these areas can be eliminated to increase how much you have left.
Accounting for every penny you spend can be challenging, but there are a few ways to make this simple. You can use an app like Trackeet to note down your expenses and get an overview of where your money went and make adjustments in the coming month.
These little adjustments eventually add up to substantial savings you can be proud of.
Build an Alternative Source of Income
An alternative source of income is a great way to increase your money and purchasing power in an inflationary environment. These sources are different from your regular sources of income or can be related.
Graphic designers, for instance, can develop learning materials for sale in addition to executing design briefs. This creates two income streams relying on your passion for design but targeting different audiences.
It’s also important to strive to have your alternative source of income as passive, where your efforts can be automated, like in the case of selling courses.
Beat Inflation With A New Mindset
The only way to beat inflation is through a mindset shift or adopting of practices that put you ahead of the rising cost of goods, such as earning in foreign currencies or adopting cheaper ways of living. Apply the methods above to beat inflation and safeguard your purchasing power or even increase it.