My friend, you know the drill – as soon as that salary enters the account, it’s ball out time! New iPhone? Check. Clubbing? DoubleCheck. Agbada for the next five owambes? TripleCheck. But by mid-month, you’re sweating like a bus conductor, wondering where all your owo went.
Sounds familiar? Most of us know the feeling of seeing our bank account balance do the shoki dance: one moment it’s there, the next it’s inexplicably gone. That’s why we’ve decided to reveal the sly money errors that Nigerians frequently make and show you how to prevent them.
1) Living the “Baller” Lifestyle
Lavish spending mentality is as Nigerian as peppered kpomo in egusi soup, but it’s a risky game. Those material flashes won’t mean much when you are soaking garri for dinner.
How to avoid this: Create and stick to a budget once salary comes in. Budgeting tools can help you manage your finances. Check out the 8-step guide to budgeting and planning with Lint for more info on how to get started.
2) No backup fund
One minute, you’re having your finest life and the next, one careless driver smashed your beautiful new car, or unplanned medical bills popped-up, or the landlord slapped you with a rent increase. Life can throw curve balls at any time, leaving people scrambling helter-skelter on how to remedy the situation.
How to avoid this: Create an Emergency Fund by stashing little amounts of money somewhere secure and liquid. When the next crisis strikes, you’ll be prepared to withstand the storm without worry.
3) Relying on One Income Stream
This can be risky even if that income stream is lucrative. Let’s say it’s a job and you suddenly find yourself in a list those being laid off, what then? As the adage goes: “do not put all your eggs in one basket”.
How to avoid this: Explore diverse income streams, such as side hustles or investments. This reduces risk and protects you during dry spells.
4) No Retirement Nest Egg
How many keke napeps do you see on the road driven by elderly men who should be retired and relaxing? Chasing hustles in your golden years is usually a sign of poor life and financial choices made in the early years.
How to avoid this: Open a retirement savings account and make monthly contributions. Do not solely rely on the hope of pensions.
5) Falling for “Get-Rich-Quick Schemes”
We’ve all had a friend or family fall for the newest “make millions in 6 months” Ponzi scheme or FX trading scam. And you know how it always ends: with tears, regrets, and a significant dent in their pocketbook.
How to avoid this: No matter how tempting a scheme looks, always assure yourself that the route to actual success is one of patience, hard work, and wise investing. Stay informed while also protecting your wallet.
6) Financial Illiteracy
Often, these challenges stem from a lack of financial education and money management skills. Money makes the world go round, and ignorance in this domain may lead to calamity.
How to avoid this: Boost your financial IQ by reading financial blogs on a regular basis, attending seminars, and using financial planning software.
