The likely scenario now is that you’re a young adult in Nigeria, experiencing the dreaded economic crisis known as hyperinflation and exchange rate fluctuation. The prices of products and rendered services are increasing each day, making it harder to afford necessities and plan for a better financial future. Your gigs are not forthcoming (or maybe they are, but the naira value of the naira has dropped), and the job market is highly competitive and restrictive. However, as Nigerians, we are known for their creativity, resilience, and everything-is-figurable nature, so taking charge of your finances and building or securing a stable financial forte as a young Nigerian adult is possible. You are on time.
Keep reading to explore some easy but effective strategies for achieving financial stability, beating hyperinflation, and welcoming your bright financial future.
1. Budget and Track
Budgeting and its follow-up tracking ensure you understand and calculate your spending habits and know where your money goes. One way to Track your income and expenses is by using a budgeting app or creating a simple spreadsheet. But this may be time-consuming due to its setup. So, to avoid being caught with that, you can use a pre-set budgeting app.
Drafting a realistic spending plan before spending is also crucial. Do this by cutting your expenses to a percentage. For example, 50% for needs (rent, groceries, black tax, emergency), 20% for wants (outings, dates), and 30% for savings and investments.
2. Automate Your Savings
Set up automatic transfers to savings and investment accounts. This “pay for me” approach ensures you’re consistently saving without needing willpower every day or month. OPay provides this offer. Imagine saving ₦500 for 365 days? That is ₦500× 365 = ₦182,500!
3. Develop Multiple Income Streams
A single income source isn’t sustainable in a hyperinflationary economy like Nigeria’s. Explore freelancing, online businesses, or side hustles that require a short learning duration and can generate additional income. This can boost your income for savings or debt repayment. For instance, If you’re a content writer, look into content strategy and copywriting. A photographer? Videography will be perfect for you.
4. Explore Local Investment Options
Nigeria is not an easy place to invest money due to hyperinflation and exchange rate fluctuations. Research local investment options like agro-businesses near you, or consider going digital with mining and investment apps like Cowryrise. However, the risks and financial goals involved must be carefully assessed. Consider a mix of savings accounts with different interest rates and withdrawal terms too. This is flexible savings.
5. Build an Emergency Funds
Emergencies are unwanted. Nevertheless, they need to be sorted. The tightest monthly budget should have an emergency slot. Emergency funds save you financial trouble and ensure your peace of mind.
6. Keep the Debt Collector at Bay
In Áfàméfùnà: An Nwa Boi Story, the newest film in the new Nollywood block, the character Paul meets his death when he forms ties with a dangerous debt collector. Avoid debt by buying what is a need and not a want. Be in control when shopping arises, and don’t be moved by the trend.
7. Beware of Lifestyle Inflation
As your income grows, focus on maintaining a healthy savings rate and resist the urge to increase your spending significantly. If you’re earning 1 million naira a month, live like you’re earning ₦250,000 for 6 months while you save and invest the rest. This may sound undoable, but it’s rewarding.
8. Get Financial Education
Financial literacy is a key to solid financial stability. Read personal financial books available online and in libraries near you. Navigating a hyperinflationary environment requires a dynamic approach and Staying updated on economic news and government policies that might impact inflation.
9. Shun Restaurants and Takeouts
The restaurant offers less time-consuming experiences but is a major budget drain. Explore affordable and healthy meal prepping at home. Cut down prep time to tackle time consumption and spice up your regular dishes by watching Nigerian food creators like myfoodbyhilda, Joyful Cook, and the_amazingama.
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10. Embrace Affordable Entertainment
There are many free or low-cost activities to enjoy without overspending. Consider attending affordable, interactive, and fun-filled events. Buying games like ludo, WHOT, chess, monopoly, and video games for your home so you don’t have to be out every day.
11. Indulge Loan Apps but Responsibly
Loan apps or lenders are necessary avenues for sorting your financial endeavors when you are in a tight ball but use them responsibly. Pay your balance in full each month to avoid interest charges and spam messages to your contacts.
12. Review Your Budget Regularly
Money is never static, so your financial situation will change over time. Remember to review your budget and its tracking every few months to ensure it reflects the Nigerian economy, income, and expenses.
13. Have Fun and Celebrate Your Financial Success
When you focus on earning, saving, and investing money, it’s easy to forget to go out and have fun with family and friends. Having fun will make you healthier, happier, and more creative. Book a massage with loved ones, go clubbing and hiking, attend concerts, and even upgrade your wardrobe at times.
The Bottom Line
Financial stability is not achieved overnight. It is a process that requires intentionality and perseverance. However, with budgeting and tracking, automating your savings, prioritizing savings, developing multiple income streams, and continually educating yourself, you can take control of your financial stability and pave a bump-free financial path.
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