5 Money Mistakes You Might be Making

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5 Money Mistakes You Might be Making

A gas station attendant displays a large bundle of naira banknotes after selling fuel to a customer in Port Harcourt, Nigeria, on Friday, Jan. 15, 2016. With his security forces engaged in fighting Boko Haram's Islamist insurgency in the north, President Muhammadu Buhari can't afford renewed rebellion in the delta. Photographer: George Osodi/Bloomberg

While everyone wants financial freedom, the road to making it a reality is not for the lily-livered. Smart decisions, critical thinking, many failures are a few ideals one has to establish.

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money

Let’s look at the few Money Mistakes you might be making as a freshman. These constitute major barriers to the goal of being financially successful.

Let’s roll it out.

LATE RETIREMENT SAVINGS 

Most youngsters are late at this. They say, 35 years of service is a long time. And yes this is not just the right time, now are you unable to save? Do you find it hard to keep a note of your spending habit? Don’t wait to start blocking those places you lose money from. That habit is risky.

Read Also: A sure way to save from your salary

 

Retirement savings should begin early. It is not too late to visit your bank and start a retirement saving plan.

At least 15% of your total income should be dedicated to your retirement savings account. While your salary is N100,000 a month, if you maintain a 15% Retirement savings, you’ll have N180,000 by year-end. That’s N15,000 savings every month.

RETIREMENT SAVINGS SHOULD BE SEPERATE FROM YOUR INVESTMENT AND EMERGENCY SAVINGS. 

At this point, let’s do a breakdown of the things you need to know.

  • In your 20s, you should have 1x your annual earnings saved up for retirement.

  • In your 30s, 3x your annual earnings

  • In your 40s, 6x your annual earnings

  • In your 50s, 8x your annual earnings

  • At 60, you should have 10x your annual earnings as your retirement savings. 

Now at this point,  I can hear you hiss, I hear you saying “I don’t make enough money so, I cant save!”. While the economic realities of Nigeria bite hard, you are better off saving than spending recklessly. Adjust your spending habits, spend less than you earn. Find that way to cut back on your spending. Tried it all without much success? N4000 a month is a good start.

 

SPENDING AT THE SAME RATE YOU EARN

Do you spend immediately you earn? Have you ever found yourself outspending your earning? Without savings or any investment in place, most people have become money conduits, even if they earn a million every month, they won’t have anything to hold onto once the month/year runs out.

In all you do, avoid Lifestyle Inflation. Plan your retirement early. A life of fun as a youth is good, but look around and see how persons without solid investments or savings are living their retirement. Take a cue from them and adjust.

Read Also: Steps to become a rich salary earner.

Focus on the Bigger Picture, if you get a raise, instead of buying a  car or going on a holiday trip, do invest. Are you searching for Investment options? Why not read this article that shares the TOP 6 INVESTMENT IDEAS THAT THRIVE IN AFRICA or STARTUP A SNAIL FARM BUSINESS 

NOT MAKING ANY INVESTMENT.

Why save so much if you don’t invest? whats the point?

You must not neglect investments if financial freedom is your GOAL. Don’t live your life paying just bills and earning a salary.  

Diversify your portfolio. If you are unsure of what to invest in, their are web blogs dedicated to serving you like Nairametrics, Loanhub & a lot of Nice financial advisors out there.

 NOT HAVING AN EMERGENCY BUDGET 

Also called rainy day budget, this is a pool of cash you can access in cases of Emergency. Do not make the mistake of having just one savings account. You will find yourself taking cash from there and spending recklessly.

MONTHLY SALARY SAVINGS

Build an emergency saving

Have an emergency saving account, investment savings, retirement savings, etc.

NOT BEING MINDFUL OF YOUR HEALTH

It never occurred to you right?  Take charge of your body. You only have one mind and one body to last you a lifetime. You should care for it.

You need to start being proactive with your health. Eat healthily, have an exercise routine. Regular medical checkups help too. Early identification of medical health issues makes treatment faster.

 

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