In Nigeria, a growing number of young adults are beginning to take the issue of financial planning very seriously. We here at Nairametrics couldn’t be more impressed every time we see such level of enthusiasm/dedication to personal finance management. After all, financial advocacy is what we live for.
When we came across the story of Peace Itimi, a young Nigerian professional, we knew we had to share it for the benefit of many other millennials who may still be struggling to manage their finances properly. Writing on LinkedIn, Intimi began by stating that she is not a financial expert and is true; she’s the Head of Marketing at Korapay. But the strategies she had adopted really do work as you shall see below.
“I am not in any way a finance expert, but in the last 12 months, I have adopted a few financial strategies that have been working really well for me; So, I thought to share. If you are a hard-working millennial and you want to get better at managing your finances, you will definitely find this video useful.”
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Saving is the first step
According to the young professional, the basic aspect of her financial planning strategies is to save. She said she is very persistent with this, ensuring that she saves a certain percentage of every income that she earns. Now, she doesn’t have a set percentage that she saves. Instead, she saves as she pleases. For instance, she can decide to save 50% of her salary or everything.
She also uses different fintech apps to facilitate her savings. The reason why this is important is that these fintech apps really have a way of encouraging young people to save. In the case of Itimi, the reason she uses different apps is that each of them serves different purposes. For instance, a particular app could make it a lot more difficult for her to withdraw than the others.
Note that saving is important because it is the foundation on which you build your financial planning model. If you do not have money saved up in your account, you may never be able to have enough money to pursue any form of investment that interests you.
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Track/budget your spending
Itimi said she created an excel sheet with which she tracks her earnings and expenditures on a monthly basis. Doing this can help you know exactly where your money is going to. It can also help you to have a better understanding of your financial lifestyle.
Now, budgeting cines as a sub-set of tracking one’s spending. After you’ve seen what your spending pattern is like, you can then be able to plan your future expenditures using a budget. Among other benefits, personal budgets help you to be mindful of overspending.
Have an emergency fund
As the name suggests, an emergency fund is simply fund set aside for emergency situations. Itimi advocates that millennials should create emergency funds for themselves because doing this helps you to better handle emergencies if they arise. Emergencies, in this instance, range from accidents to loss of job or anything situation that might temporarily incapacitate you from being able to earn revenue within a given period. Your emergency fund should be able to take care of you within such a point in your life; should it ever arise.
[READ ALSO: Why your savings are not growing]
Also, create an investment fund
This one is very straight forward – the essence of saving up for the purpose of investment is so that when the fund has accumulated enough, you can then invest it for the purpose of earning more money in return. They are so many investment options out there for you to try, such as mutual funds to bonds, treasury bills and equities.
You may follow the YouTube link below to see the rest of Peace Itimi’s financial management strategies. Ensure to adopt the ones that work you. Also, recommend to the millennials in your life.