Financial Planning in Your 20s in Nigeria is usually not the topic discussed with teenagers becoming young adults. Most people in their 20s are usually stuck between saving money and you only live once. Every other thing in between like budgeting, how to makes wise money decision, long-term money goals, short-term money goals, savings and most importantly investing, is usually not discussed with young adults in Nigeria except but a small percentage.
As a young Nigerian in your 20s, you would usually fall within one of these four categories; a fresh graduate, a just discharged corps member, an employee at the edge of kicking off your career, or an entrepreneur trying to figure out how to get started.
Regardless of where you belong, financial planning in your 20s is important. So it is time to start getting serious about managing your money and here is how to get started.
Make a realistic budget
A budget eliminates uncertainties about your finances. List your income and expenses. A budget helps you limit expenses to disposable income. Once you have developed this discipline, the next step is to include the savings in your budget. To establish a budget, it is first important to track, list and categorize your expenses. This will help you eliminate, reduce and rationalize your expenses so you can save money.
To get to your goals efficiently, you need to create your own budget
Build an emergency fund
In the early years of your career, your income can go up and down as you explore your options. An emergency fund will protect you against these uncertainties. Set aside the emergency fund before saving money for another use. Be disciplined when using the funds and how to replenish them when you use them. Periodically review your emergency fund requirements to match your current income needs. In the absence of this, you risk getting into debt and harming your finances.
Start saving for retirement – now
Young people are less likely to have a job with a retirement plan, but even those who do are less likely to save. The money invested in your twenties has a lot more time to grow, which means you may not need to save so much money later in life.
A person who saves money for 10 years from age 25, assuming steady growth, will retire with more than someone starting at age 35 and saving for the next 30 years.
In other words, you can save 10 to 15% of your income in your twenties or wait and save 25% or more in your late thirties to get the same result. Wait even longer, and by the end of your 40s, and you will need to put aside 35% of your income to catch up.
Spend less money with a debit card
An ATM can be a useful tool for managing your finances. But to build good money habits with an ATM, you’ll need to use it wisely. Having the right mindset and understanding why you’re spending with ATM is helpful for keeping your spending in check. Remember that when you spend less, you may have money left over in your budget to save and pursue other financial goals.
It is amusing to see how many young Nigerians think it is wise to invest when you are in your 40s or 50s when you have millions in your account. In fact, investment is the last thing we have to talk about when we talk about money. The truth is that investment is now easier and everyone can start an investment plan. Financial institutions now facilitate any investment, just find the one that is verified and effective and start investing.
3,277 total views, 8 views today
3,278 total views, 9 views today