There are two kinds of people, those who make personal finances management mistakes for the rest of their lives, and then there’s you, who have made mistakes but found their way to this article because you’ve seen the light.
So here are five mistakes you probably made and how to stop making them.
Having only a fair idea of how much you spend every month can be a risky game to play long term, especially if you earn monthly. When asked how much you spend, sure a few recurring bills come to mind, but when you go through your transactions, you’ll be surprised at where a substantial amount of your earnings might be going. To avoid these lapses in managing your money, it is important to draw up a detailed budget and stick to it.
A sudden or unexpected rise in your earnings might entice you to bolster your current lifestyle and sometimes set you on a path to “keep up with the Joneses”, and while it’s perfectly fine to splurge on yourself, it is important to consider the goals you set for the year. Perhaps you plan to buy a car or move into a new house, holding back could help you reach your goals faster. Remember, there’s satisfaction in delayed gratification.
There’s nothing more unhealthy for your financial life than living off borrowed money. Make solid plans towards paying off all your loans and follow them to the T. One quick tip if you are juggling multiple interest loans is to treat them according to their interest rates from the highest to the lowest.
It shouldn’t be heard in 2021 that you earn money without setting aside funds for emergencies or unforeseen circumstances like job loss, or an illness. Finding last-minute tickets to a live concert is not an emergency, this money should exist to protect you from crippling debt in unplanned situations, so keep this in mind while putting this money away.
Developing a regular savings culture is the first step towards better money management skills. These days, regular savings are easily accessible on ALAT. You can join our daily savings challenge and see if you could be among those who save up to N500k by the end of the year.
Not on ALAT? Download the app and sign up today.