2018 was a robust year for some but for many, it was a period of financial draught considering the statistics on the Nigerian economy. Indeed the economic situation of the country may deal a huge blow on individual pockets but you can plan to mitigate your exposure by working hard, living right and doing the needful.
Wealth accumulation is easier during your active years. That is the time you can accumulate the wealth that will sustain you when you eventually become passive. Nobody will retain the same level of productivity forever. Usually we have between 25 years to 40 years of our lives to work and even so, our ability to work depreciates with age. Therefore, you need to “make hay while the sun still shines”.
What sets people apart in life (even in finance) is the mindset.
Here are 5 ways to detoxify your finances and keep it healthy in the new year.
1. Don’t spend more money than you make:
A lot of people spend more money than what they have or are expecting by the end of the month. They take loans and keep building never-ending debt. Shopping is what consumes a large chunk of young people’s money. Fashion, gadgets, hanging out etc. You have nothing to prove to anybody so, focus on building your future.
“Little drops of water can make a mighty ocean“. Many focus on frivolities. As soon as they get money, they rush to buy buy buy. In the end, they are left with nothing to save for the rainy day. They eat up everything including what should have been set aside for the future. So, the struggle continues.
You can start saving from your bedroom with a piggy bank. Start with loose change, then be diligent, with time you would be self-motivated to do more. The result will add to your ginger.
This cannot be over-emphasized. Many young people are not interested in investment. Maybe much is not being said about personal finance on the internet (seeing as the internet is not the biggest influencer). They work and rather than spend their money on things that appreciate in value like stocks & bonds, they spend it on the opposite such as Cars and fashion.
Spending a large chunk of your earnings on liabilities will only render you bankrupt. You need to start investing whether for the short-term, mid-term or long term. Also, spread your risk by diversifying, seek financial advice from experts, get mentorship from successful people and the sky will be your limit.
4. Get a side hustle:
If you have daily expenses (especially if you deal with unplanned/unbudgeted expenses daily which is inevitable in an environment like ours) you would need to increase your streams of income.
The goal is to make more money and a side hustle is definitely part of the flow. Look for problems that you can solve around you, offer service and get paid. If you are a career person, you can learn a vocational skill and start using it on parttime bases or become an investor to someone else’s business/idea. Multiple streams of income will quickly help you to put an end to the rat race and set you on the path to self-sufficiency.
5. Work towards financial freedom:
You want to get to a point where you get to make life decisions without being overly stressed about the financial impact because you are prepared. Travel the world, pay your bills and enjoy the benefits of being able to afford whatever lifestyle you choose as far as money can buy.
Having more than enough money to take care of your needs is actually a tough-call but its possible with hard work and self-discipline you can create the kind of wealth that works even when you’re no longer working.
Even after reading this article there are many black people that will not work towards changing their situation. Too many people tend to only worry about themselves and the money that they have at the moment. You must fight to create wealth that not only serves you at retirement but the type that can be passed down to your next generation.
All you’ve got to do is START. You have the chance to kickstart the year applying financial intelligence. Don’t waste it!