It’s that time of the year again, the season of Christmas, “Jingle bells” yay! We hear people saying, “This December will be detty”. Now before you start thinking of painting the town red this December, sit back and think about your personal finances. Will you go broke after having a detty December, or will your finances be stable?
This article will provide you, as a young adult, with financial tips on how to improve your financial situation. These financial tips will help you with money management.
Before discussing these financial tips to help improve your personal finance, you need to understand what personal finance means. Personal finance entails how you manage your money to meet your financial goals and make plans for the future.
Make a budget
A budget is a plan that shows an estimate of your projected income and expenditure for a particular time. Budgeting involves understanding your income resources. It is a fundamental money management skill that you need to learn to improve your personal finances. Now, it is one thing to make a budget, but it takes discipline to stick to it. Take me as an example. I always make a budget ahead of my next month’s revenue and this helps keep me in check.
Live within your means
In Lagos, most people have this ideology of “fake it till you make it”. This is done so that they can seem to fit into a particular lifestyle they cannot afford. Hence, you see them living above their means. One healthy personal money management tip I can give you is to spend less than you earn. This will save you from going into debt.
Save, save and save some more
Saving refers to a portion of an individual’s income not spent on current expenses but kept for future purposes. I cannot overemphasise the importance of saving. An important healthy money management tip for adults is to learn how to save. With savings, you can never be caught off-guard, especially in emergency cases. As young adults, set aside a certain percentage of your monthly or yearly income for savings. Managing your finances involves you investing in savings.
Have an investment plan
Investment refers to money put aside for something to acquire profit in the long term. I know a lot of you are scared of investing. Some of the reasons are:
- it takes longer to mature,
- the interest rate is low,
- and then there is the ultimate fear of the company folding up.
Your fears are valid, and that is why you need to do your research on the company or business you wish to invest in. When you fail to do your research, you might fall into the trap of pyramid schemes. There are established and trustworthy investment companies or fintech out there that are waiting for you to take your personal finances seriously. Examples of such companies are piggyvest, cowrywise, trove, risevest, bamboo, etc.
Seek financial advice
At the end of the day, we all need advice on personal money management from experts. From their wealth of experience, you can learn how to improve your financial situation.
Get an accountability money pal
As a beginner starting up the personal money management journey, you might find it hard to stay on track. But having someone who can spur you on will be helpful as you take on these financial tips. They might also give you tips that have kept them consistent on their money management journey.
Avoid debts
Debt is an amount of money borrowed (collected) by one person called a borrower from another person called the lender. I understand that there may come a time when you need money, and just maybe you do not have cash in hand. It is essential to consider what you need money for before borrowing. Ask yourself if the need can wait till you have your own money. If the answer is yes, then do not borrow. Having an accumulation of debts is not a good financial habit, it only results in headaches.
Take Home
As young adults, understanding the importance of financial literacy is fundamental. It will help you effectively follow the above-listed personal money management tips. The knowledge will help you with your personal finances for not just festive seasons like Christmas but all year round.
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Finance Buddy 
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