In this article we will see discuss how to make smart money moves as a young Nigerian who is just starting out his life and wants to make the most money.
As a young professional with a relatively steady income, there is usually the belief that the world is your oyster because you’re suddenly earning more than you imagined and you’ve begun your journey to financial independence. Follow closely to know how to make smart money moves?
With the current financial situation and the dollar-naira difference, there is the need to be very smart with money. Yes, expenses will come, but life must be lived. So, how can you protect your finances against the knocks of adulthood and life?
We have developed a mini-guide on how to make smart money moves with your income.
How To Make Smart Money Moves
1. Learn Self Control:
If you’re lucky, your parents taught you this skill as a kid or you have the natural ability to wait and enjoy the finer things at a later date. If not, keep in mind that the sooner you learn the fine art of delayed gratification, the quicker it is easy to keep your finances in order.
Always ensure your basic needs are covered first – data subscriptions, electricity bills, etc – before you consider your wants, i.e. things that aren’t essential.
2. Create a Solid Financial Plan:
Your financial plan should comprise how much you intend to spend, save, and invest. As soon as you earn your income for the month, plan how best to maximize it and remain debt-free. Having a financial plan motivates you to take control of your finances.
You might also consider getting financial advice from trusted financial professionals so you can explore your options.
Set financial goals to help you better manage your money because then you know what you’re working towards. Perhaps you’re planning on getting a new apartment or maybe you would like to go on a holiday or buy a car.
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3. Budget Every Single Spend:
A financial plan and a budget are not the same things. A financial plan is a long-term plan for your finances – income, wealth generation, investment, etc. While your budget curtails your spending to ensure you live a luxurious life within boundaries.
One of the most important steps is to plan your monthly entertainment and miscellaneous expenses. No one has ever died from being organized.
Your budget gives you an overview of how you want to spend your money. It helps you to track your spending and can prevent you from overspending and going into debt.
4. Establish an Emergency Fund:
An emergency fund, also known as ‘rainy day’ savings, is your personal insurance policy attained through your savings. Apart from having long-term savings, you need to have a rainy day saving plan that provides you with a cushion against large unexpected expenses. This way, you won’t tamper with your savings.
5. Avoid Getting Into Debts:
This is very important. When you’re young, and you’re earning a good salary, there’s always the pull to enjoy your life to the maximum. There’s nothing wrong with that!
However, avoid borrowing to sustain your newfound lifestyle, especially for unnecessary things. Don’t fall into the trap of trying to keep up appearances or spending irresponsibly.
The cost of borrowing puts a strain on your income, and this can be stressful in the long run.
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6. Save for Retirement:
If your dream is to retire by age 35 or 40 – it is possible. Saving and investing smartly could mean early retirement, and you get to live your baby boy/baby girl lifestyle. So it’s only wise to open a pension fund now and allot a segment of your income to that fund.
If you think you are too young to start saving for retirement, remember that small monthly deposits over a course of 20 to 30 working years will become huge sums and can end up with as much (if not more) as someone who made a lot of deposits each month but started saving at a later time.
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Tips On How To Make Smart Money Moves
- Learn Self Control
- Create a Solid Financial Plan
- Budget Every Single Spend
- Establish an Emergency Fund
- Avoid Getting Into Debts
- Save for Retirement
- Create a budget. ...
- Contribute to your retirement fund. ...
- Focus on increasing your income. ...
- Cut back on your living expenses. ...
- Find a financial mentor. ...
- Pay off your debts. ...
- Focus on improving yourself. ...
- Stay passionate and driven.
- Play video games.
- Make mind maps.
- Solving problems.
- Puzzles and games.
- Make yourself smarter.
- Brush up on vocab.
- Lift weights and eat healthy.
- Travelling to a foreign country.
I hope you’ve learned one or things about how to make smart money moves as a young Nigerian.