In one way or the other, I know you did think about your financial future sometime in January when everyone talked about New Year Resolutions.
If I may ask,
How far have you gone to achieve those financial goals you set earlier this year?
You know, it is not usually easy to keep to personal rules, as issues keep rising to oppose our goals and targets.
But in all, we must keep our heads up to achieve our aims; it is when we do that, we will be happy we succeeded.
So, it does not matter how far you have gone to achieve your personal finance goals for this year and perhaps, beyond.
The right time is now, and I think I have here what will help you through.
Discussed below are the top 8 personal finance hacks that will make you rich in 2021 and beyond in Nigeria.
So, why not calm your nerves and read along carefully to grab the whole gist.
- 1 1. Take Budgeting Seriously
- 2 2. Pay Yourself First
- 3 3. Manage Your Debt
- 4 4. Do not Spend More than You Earn
- 5 5. Set Aside Emergency Fund
- 6 6. Have multiple Streams on Income
- 7 7. Set Real Goals
- 8 8. Invest like a Pro
- 9 Conclusion
1. Take Budgeting Seriously
To be rich, you must monitor how and where you spend your money. And to keep track of your expenses, you will need to have a budget that works.
What are you planning anyway if you do not know how much you spend, or how much you should allot to your weekly or monthly expenditure?
Maybe you are afraid of the rigorous calculations and paperwork that may be involved in crafting a budget. But you do not need to rely on that method again.
There are budgeting apps that can give you all you require, to have and maintain a good personal budget. Such apps include PiggyVest, KoloPay, Cowrywise, SumoTrust, and so on.
But first, get your bank account statements (say, for three months). Analyze and categorize what you spend on according to the following:
- Utility bills
- Transportation and so on
- Internet subscription
- Travels and Tours
- Shopping and so on
From this analysis, you will know what to cut-down to save more money for yourself.
2. Pay Yourself First
What comes to your mind first on the payday? Go shopping for clothes, shoes, the latest devices, or hang out with friends over drinks and food?
You should get this correctly: if you must live your dream life (the one we can generally refer to as successful), you should cut the crap of living from paycheck to paycheck. You should not get on a spree and squander money before you plan.
Please, this does not mean you should not spend on yourself. No! You should take care of yourself very well.
Rather, what I am insinuating is that you should set aside a certain amount of your salary or earnings into your savings account or your pension savings plan.
Ensure you do this regularly and that you do not touch the money except when it is enough to be invested.
Here are some of the benefits of paying yourself first:
- It is a smart approach to accumulating wealth.
- You will always have funds available for investment.
- Paying yourself first enables you to live on less; to save and spend wisely.
- You will take investment as a priority and not as an alternative or afterthought.
- It will build your money discipline and help you budget better.
- It leaves psychological well-being which allows you to focus more and bother less about the future.
From these and more, you will understand with me that paying yourself first is a great personal finance hack that will make you rich.
3. Manage Your Debt
To be financially buoyant and psychologically balanced, you must be able to manage your debt. Although, the best option is to stay out of debt. But since that is not usually the case, you should rather manage it.
In managing your debt, you should stay out of bad debts like acquiring liabilities than assets.
Say you want to go on a vacation or you want to buy a car or some luxury materials, and all you want to do is get a loan. No! You should not do that.
Some debts can be considered good: Ones like a student loan, mortgage loan, or business loan.
Managing your debts also involves that when getting into these ‘good debts’, you choose an option you can afford and ones you can pay back easier.
To manage your debt, I believe these points will help you:
- At every point in time, know how much you owe.
- Create a payment calendar and ensure you pay at least the minimum payment on every due date.
- Ensure your budget captures your debt
- Do not keep what you do not need; they are liabilities so sell them and use the money to offset some bills.
- Decide which debt to pay off first; take a step at a time.
- Ensure you get help from a credit counseling agency when you are finding it difficult to stick to the plan.
4. Do not Spend More than You Earn
This in a way reiterates the point that you should stay away from debt. If you spend more than you earn, you will land in debts. That’s bad for you who wants to climb the financial ladder.
It is funny how people spend all their earnings even before the payday arrives. You should never belong to this class of people if you want to be rich.
To make sure you spend lesser than you earn:
- Take care of your needs instead of your wants. This starts with distinguishing between your needs and your wants.
- Be strict with your budget
- Put your goals before you now and then.
- Calculate your actual earnings per day from your salary (divide your salary by 30). By so doing, you will know the limit of money you should spend per day.
5. Set Aside Emergency Fund
What if you lose your job? What if you are hospitalized for so long? What if the company you work for goes bankrupt? What if you have an accident tomorrow?
You know, all these questions come to ask if you have a backup. You will be badly struck if you do not have any backup.
So to spare yourself the financial pressure, it is good you set aside an emergency fund.
I already stated that the best time to start using these personal finance hacks is now.
So, you can start by saving a little monthly. What matters is your consistency.
You should save from six months to a year’s expenditure as for your emergency fund.
Having an emergency fund will give you the freedom (emotional and psychological) to get busy with other issues and keep you from worries.
6. Have multiple Streams on Income
It is financially risky to live on one source of income. As a matter of fact, among all the self-made millionaires, 65 percent had three streams of income, 45 percent had four streams of income and 29 percent had five or more streams of income as stated by my source.
With this, you can agree with me that having multiple streams of income is necessary for anyone who wants to be rich.
A thought about “what if I lose my only job?” will grant you more reasons to consider it as one of the best ways to grow and stay safe financially.
Advantages of having multiple income sources
- You will achieve financial independence faster.
- It helps you scale faster on the ladder of wealth.
- It assures you greater stability and more safety.
- You will better tackle your debts and pay off quicker than when you have one source of income.
Different Streams of Income You can Try
So how can you acquire more streams of income?
Here is my suggestion:
- Become a virtual assistant.
- Why not become a blogger?
- You can become a content writer
- You can create your product or service
Remember you are not restricted in a box. Think outside the box but within your passion.
7. Set Real Goals
Do you have any target or are you just saving because you need to save? I think it is time you started saving with a purpose; saving to reach your goals.
Chances are more that you will be more disciplined to save when you have goals.
These goals will serve as your motivation and give you more reasons to keep on keeping on.
What can These Financial Goals Look Like?
- To save up to NGN100,000 by the end of the year
- Saving for vacation
- Saving to buy your dream house
- To have a NGN1 million
These goals must be achievable goals and not vague ones. But I will suggest you make sure you have one goal at a time. This helps you to keep track and focus on one thing at a time.
“We need to give our financial goals specific, exciting names that conjure up images and feelings that thrill us.” – CNBC
8. Invest like a Pro
To be financially successful you must invest. Of course, there are no better ways to grow your money than investing and reinvesting, wisely.
As one who has not invested before, or had invested but lost, you will be scared of investing: you would not want to lose, and keeping in your savings account is the best thing.
It should be clear to you that not until you invest, you will not know what you have been missing.
You must let your money work for you. What is success without risk anyway? Life on its own is a risk after all.
Some Investment Tips You Should Consider:
- Do not invest in greed
- You must understand the uncertainties in the market you are investing
- Do not be scared of small losses; every investment is a sort of gamble anyway.
- Diversify your investment.
- Never stop learning how to invest.
My Suggestion of where you should Invest:
- Real Estate
- Exchange-Traded Fund
- Index Funds
Do not limit yourself to these few stated above; there are more.
Life is guided by principles and anyone who understands these principles will excel. Money is an important tool in life. So anybody who wants to attain financial freedom must follow certain principles.
These principles have been encapsulated in the 8 personal finance hacks to make you rich in Nigeria discussed above.
There is more to it though. But with these, you will be able to launch into the world of financial success.