6 Pieces Of Financial Advice That Changed My Life Forever

If you ask most young people, they always tell you they want to be financially free by the age of 35. But what they say vs what they do is completely different.

Truth is that everyone wants to be financially independent, but not everyone is taking the step to ensure that they are financially free.

Let’s take the case of Mr. Tijani Olawunmi as an example. During my discussion with Mr. Tijani, he stated he would like to retire at the age of 38. But while asking him a couple of questions, he stated he was in debt with the bank; he has no savings; he has no side business or side income. Besides everything, he has not been looking at ways he can make a side income.

As of the time of this discussion, Mr. Tijani was already 33 years. Although he wants to tire at 38 years, the decisions he is currently making show he is likely to still be broke by the age of 38.

Although Mr. Tijani case is funny, we can say that this is the most case for most young people who want to be financially free.

Studies show that most young people struggle to live within their income. They overspend in one of three ways, too much house, too much car or too much entertainment.

But can you blame them?

No one teaches us how to manage our finances.

For me, I didn’t learn most financial basics until I started working for a tech firm in Lagos.

What funny what’s that I did not take a financial status seriously until I was 26years.

I can remember taking my first financial management course at the age of 25. The course was hosted by someone who claims to be a financial expert. While I can’t tell you a thing I learned, I can tell you what I didn’t learn.

I didn’t learn about investing, calculating interest on debt, or the problem of compounding interest.

While I’m currently advocating for more financial and money skills to be taught in high school and university, the truth is that not much has changed. Most high school principals believe that financial education should be taught to the student when they get to university.

While me and my team are still working on ensuring that this perspective change, I would like to share with you 5 financial advice that changed my life forever.

1) Purchase quality over quantity.

This is very controversial, but it is true.

As a shopaholic, I spent my early 20s making every Naira count.

In my early 20s, I spend money on getting cheap shoes. I also buy lots of fake (inferior quality) shoes because they are cheaper.

However, I later discovered that buying fake things or cheap things makes you spend more.

For example, if you buy inferior quality shoes in Yaba (a market in Lagos State), you would notice that those shoes don’t last up to 4 months. But if you buy a high-quality shoe for a higher price, that shoe can be used for up to 3 years.

The same goes for all products.

Investing in quality over quantity was a valuable lesson (a big one). Quality does not mean buying an expensive or known product, but it means taking your time to research large purchases that are built to last.

It takes discipline, patience, and a practiced eye.

But if you invest in better goods, you would find yourself spending less in the long-run.

2) Live within your income (always create a budget and always be realistic)

Studies show that most young people struggle to live within their income.

They overspend in one of three ways, too much house, too much car or too much entertainment.

Budget plays a critical role in controlling spending, paying off debt, and keeping track of your financial goals.

Creating a budget can be as easy as ABC. you can use pen and paper or a budgeting app if you are tech-savvy.

It is always crucial that you put your savings on autopilot.

As I always tell my student, save before spending. This means save then spend what’s left after saving.

Additional note:

Always make your budget and savings target realistic. You cannot set a target on your savings the same way you start a diet: with tons of enthusiasm and completely unrealistic expectations.

Just like it’s impossible to sustain weight loss by only eating 2000 calories per day, it’s impossible to stick to an overly restrictive budget.

To make a realistic budget and savings target, tally up your monthly expenses, utility bills, and other essential expenses.

3) Invest in your self

If you are in your 20s, that is the best time to invest in yourself.

Rather than investing all your time in a job that pays only N100,000, you must invest the same time doing some professional course and earning a master’s or doctorate. This would yield a good result in the long run.

4) Health is wealth (Health insurance is a must)

If there is one thing this COVID-19 made me realize, it is that health is wealth.

What good is your wealth if you don’t have a firm body to enjoy it?

You must concentrate on your state of well-being so that you can enjoy life to the fullest when you finally get the financial freedom you want.

Besides, I always recommend that everyone get health insurance.

I know this would sound strange to most Nigerians. We leave everything to the blood of Jesus. But if you are dying or if you are sick, you need to go to the hospital. When you are in the hospital, you can then pray.

Instead of you going to the hospital and spending about N300,000 on medication and treatment, why not get insurance instead?

You can get insurance for as low as N3,500 per month.

Health insurance helps you to cover any medical cost without disturbing your investments. Even if your employer provides health insurance, it’s always better to have your insurance. This is because the health insurance offered by your employer won’t be in effect in the event of a layoff/job loss.

5) Have an emergency fund

I cannot overstress the importance of having an emergency fund. This means you set some money aside for emergency purposes.

This fund gets you through times when income is low or non-existent.

Most financial experts recommend having 3–6 months’ worth of living expenses.

But I always recommend that you build your emergency fund to N500,000.

6) Start saving now

The first step towards financial freedom is savings. This sounds like a painful process and we often tend to delay it. However, delaying it can prove to be more painful in the long run.

An investment platform like Investa is a perfect way to start your financial journey with. You can invest or save 10–20% of your income. You can also get up to 25% of interest on your savings on the platform.

Final thought

Many of us think back to our early 20s and reflect on some pretty careless mistakes. But instead of feeling embarrassed about the way we viewed and spend money, use your newfound knowledge as a stepping stone for building a good financial habit.

Truth is that in your 20s, we are just beginning our adult lives, and there is plenty of time to right any wrong.

So, it’s not too late to improve your financial habits — start today, and know that your past mistakes have helped to make you a better person. What were some financial lessons you learned in your 20s