How to save for yearly rent, one month at a time

Why yearly rent keeps turning into a crisis

In many Nigerian cities, rent is paid a year or more in advance. The money leaves once, but it has to be built up over twelve months, from the same salary that pays for food, transport and everything else.

Money for a payment that's months away sits in the same balance as today's spending, so it gets used for today. Nothing about next year's rent feels urgent in March. By the renewal month it's urgent, and the gap is too big to close from one salary. That's when people borrow, ask family or accept a worse place.

A large payment that arrives once a year needs a system that works every month. Research on lumpy expenses finds the same: Kenyan dairy farmers were willing to pay real costs to receive their earnings in less frequent lumps, as a way to save for big expenses.^[1] People know they need protection from their own everyday spending. A good setup gives it to them without the cost.

What the rent really costs each month

An illustration. Rents and fees vary by city, area and landlord.

	If saved monthly	If left to the renewal month
Next year's rent	₦1,200,000	₦1,200,000
Months to save	12	1
Needed each month	₦100,000	₦1,200,000

A ₦100,000 monthly cost is something a salary can plan for. A ₦1,200,000 bill in one month usually isn't. Moving to a new place adds more: in Lagos and other cities, a new tenancy often comes with agency, legal (agreement) and caution fees on top of the rent. Ask for the full amount before you plan.

What makes rent money stay rent money, with or without Delight

1. Use next year's price. Ask your landlord or agent early, or assume an increase. Saving towards this year's rent leaves you short at renewal.
2. Divide by the months left. That's your monthly rent cost. If it doesn't fit your salary, you know now, while there's still time to plan.
3. Move it on payday, first. Rent money moves before everyday spending starts, not from whatever is left at the end of the month.
4. Keep it where you don't spend from. Money set aside in a separate place is easier to leave alone. In one well-known study, bank clients in the Philippines offered a savings account they couldn't withdraw from until a date or goal had average savings balances 81 percentage points higher than a comparison group after a year.^[2]
5. Put a cost on breaking it early. A lock with a penalty turns "I'll borrow it and put it back" into a real decision.
6. Time the release. The money should be available in the week you pay, not months before.

Set it up in Delight

1. Check your tier. Tier 1 can hold up to ₦300,000 and Tier 2 up to ₦500,000. To save a full year's rent above that, upgrade to Tier 3 (it adds address verification with a utility bill) for no maximum balance.
2. Create a repeating Rent budget with your monthly rent amount, for example ₦100,000 a month. If you keep a monthly group, add it as a sub-budget.
3. Let payday fund it first. Check that Auto-fund is enabled on the budget, then open a budget's menu, tap Funding priority, and drag Rent near the top.
4. Create a Stack on the Rent budget. In the Grow tab, set the target to next year's rent and the due date to the week you'll pay. Choose the share of each funding that moves into the Stack.
5. Lock it until it's due. When asked whether you can take money out early, choose No, lock until due. If you want a safety valve, Yes, but a limited amount lets you take out up to a set sum for emergencies.
6. Know the cost of closing early. You can close a Stack at any time. Closing a locked Stack before it reaches its target costs 5% of its balance, a penalty you agree to when you set it up. Delight shows the exact amount before you confirm.
7. Top up when you can. Extra money, such as a bonus, can go straight in with Fund Stack, or from another budget with Reallocate funds.
8. Pay on time. On the due date, the Stack unlocks and its money is available to spend for 7 days. Pay the landlord that week. After 7 days, anything left moves to the Rent budget's surplus.