As we all know, saving your money is good way to ace financial freedom. It can also help you achieve your financial goals, build wealth, and secure your future. While saving in your local currency, the Naira, is a viable option, saving in foreign currencies, such as the US dollar, can offer additional benefits.
In this article, we will discuss how to start saving your naira in dollars and other foreign currencies.
Why should you save in Dollars and Foreign Currencies?
Before we dive into how to save in dollars and foreign currencies, it’s essential to understand why it’s a good idea in the first place. Here are some reasons why you need to save in dollars and other foreign currency.
1. Hedge against currency devaluation
The naira has been known to devalue over time, which means that its purchasing power decreases. Saving in dollars or other foreign currencies can help you hedge against this devaluation and maintain the value of your savings.
Access to foreign investment opportunities: Saving in dollars or other foreign currencies can give you access to foreign investment opportunities that may not be available in the local market. This can help you diversify your investment portfolio and potentially earn higher returns.
2. International travel and education
If you plan to travel or study abroad, saving in foreign currencies can help you avoid currency conversion fees and fluctuations in exchange rates. We all know how this is more beneficial. Now, let us go into the main business.
How to Start Saving Your Naira in Dollars and Foreign Currencies In Nigeria Now
Now that you understand the benefits of saving in dollars and foreign currencies, let’s discuss how to get started in just simple steps.
Open a domiciliary account
The very first step is to open a domiciliary account. You may be wondering what its all about, bring your hands, let me walk you through.
In an actual sense, it’s an account that allows you to save money in foreign currencies while staying in either your local or any other country.
To open a domiciliary account, visit your bank and provide the required documentation, such as your ID card, passport photograph, and utility bill.
Fund your domiciliary account
Once your domiciliary account is open, you can fund it with your Naira. Your bank will then convert the Naira to the foreign currency of your choice, such as the US dollar, at the prevailing exchange rate. Don’t let that come as a surprise. Let’s move on.
Set a savings goal
To save effectively, you need to set a savings goal. Determine how much you want to save and when you want to achieve it.
This will help you stay motivated and focused on your savings plan.
Create a savings plan.
Once you have set your savings goal, then, you can proceed by creating a savings plan. This typically involves determining how much you need to save each month and setting up a standing order or automatic transfer to your domiciliary account.
Monitor your savings
It’s essential to monitor your savings to ensure that you are on track to achieving your savings goal. Review your savings plan regularly and make adjustments if necessary.
Tips for Saving in Dollars and Other Foreign Currencies in Nigeria.
If that’s not enough, let’s quickly go through these four yet powerful tips that can make you stay motivated in saving your Naira in Dollars.
#1. Save consistently
As we all know, consistency is the main key to effective saving. As I have previously mentioned, you can set up a standing order or automatic transfer to your domiciliary account and save regularly.
#2. Take advantage of favorable exchange rates
Secondly, take absolute advantage of favorable exchange rates. How? Why? Keeping an eye on exchange rates and taking advantage of favorable rates to fund your domiciliary account is a wise decision why saving. I have used this method over and over again! Guess what? I have made a lot of gains from this because I buy when rates are low and sell when it’s high.
#3. Consider the risks
While saving in foreign currencies can offer benefits, it’s important to consider the risks. Exchange rates can be volatile and fluctuate rapidly, which can affect the value of your savings.
#4. Use a reputable bank
When opening a domiciliary account in Nigeria, kindly note that it’s very important to use a reputable bank that is regulated by the Central Bank of Nigeria (CBN) Such as Zenith, UBA, and GTB. This will help ensure the safety and security of your savings. No termite will eat your money (invisible charges).
Thanks for your patience in reading this great end.
All in all, saving in foreign currencies is a good option for Nigerians including businessmen and bloggers who want to protect their savings against devaluation and access foreign investment opportunities.