Making money in Nigeria is not easy. Most of us work from 9 am to 5 p.m. and juggle up to three side hustles just to keep body and soul together. It is so stressful. When you work this hard, making financial mistakes that cost you a lot of money can be very painful.
Imagine losing N200,000 in this economy because you invested in the wrong business. It will hurt more than when Chioma broke your heart.
There are many common financial mistakes Nigerians make, especially when it comes to managing money.
In this article, we’ll explore these mistakes and share practical tips on how to avoid them.
Let’s dive right into it.
7 Common Financial Mistakes and How to Avoid Them
1. Not Understanding How to Manage Money
Many of us don’t know how to manage money effectively. We receive our salary and start spending like Odogwu.
We give money to whoever asks and visit all the restaurants in Lagos without a second thought. Then, one week later, we’re begging our friends for urgent 2K.
This shows a lack of good money management. It’s crucial to learn how to manage money wisely.
Read books on financial management and practice what you learn. Know when to save, invest, and prioritize your spending. Your future finances will thank you.
2. Shying away from Budgeting
Many people have this mindset: “Money that will finish will finish.”
They don’t track their spending, especially on things like food, transport, and entertainment.
Overspending on mundane things leaves them without enough for important expenses.
Although prices of goods and services go up everyday, having a range for every financial obligation in your budget makes all the difference.
3. Not Adjusting To Current Dispensation
Nigeria today is not the same as what it was in the past.
This means the current economy differs from the one that existed two years ago. Both locally and globally, things are becoming more expensive.
You might have been able to afford a lavish lifestyle years ago. You might not be able to right now. The smart thing now is to cut your excesses and focus on surviving in the current economy.
4. Spending on Anything and everything
This is another big financial mistake. You shouldn’t buy something just because you can afford it.
It is important to be financially disciplined. Learn the difference between your needs and wants and which need or want is a priority.
5. Begging For Urgent 2k Every Month
Borrowing money isn’t bad, but constantly borrowing is a problem.
Borrowing an extra N50,000 to buy that shoe you can’t afford or exhausting your small salary in one week on frivolities is not financially healthy. It will leave you broke and in more debt.
There is a whole article on how to avoid debt on our blog. The important thing is to stop borrowing and set up a repayment plan for existing debt.
6. Don’t Have Savings
How can you build wealth without savings? Many people don’t save. Their excuse is the economy is hard.
The hard economy is the exact reason you should save. Start from as little as N1000, but start saving.
With the emergence of savings apps like Jollof+, you can save from the comfort of your house.
7. Investing In Things You Don’t Understand
Investing is a great way to grow wealth, but blindly investing in things you don’t understand can be risky.
Don’t invest in fish farming if you don’t know the difference between croaker and catfish.
Always understand the risks, returns, and structure of the investment before putting your money in.
This will help you make smart investment decisions.
All in All
This list isn’t exhaustive, but these are some of the most common financial mistakes Nigerians make. Mistakes are part of growth, but recognizing and avoiding these financial pitfalls early can save you money and stress in the long run.
