Have you ever had flashbacks of the times when you received money from and then you wonder just how you spent it?
This past week, for some reason I found myself having those flashbacks more often. Some of my friends claim these flashbacks occur when you are low on cash at the moment. Maybe, maybe not.
Either way, since I can’t change how a 10-year-old version of myself chose to buy a lollypop sweet instead of saving, I moved on to reflect on something I can in fact change which are financial mistakes I have made in my early 20s.
In hindsight, I realize I had a very unhealthy relationship with money. I saw money as a tool that comes monthly with its share of anxiety, but that gets you things you want.
While sharing my reflections with others, it was interesting to find out that a lot of people my age also have this same unhealthy relationship about money.
Due to this, I have begun to sit back and examine, as much as I can, some of my financial mistakes, the outcomes, and what I learned from them.
I hope you find these helpful.
Gain a lot of information on finances .
There is a popular saying that “Knowledge is power”. Having sufficient knowledge about a particular aspect gives you an edge in that area. The same applies to having knowledge when it comes to finances.
One major lesson I have found to be true for me and people who I have examined their lives is that our relationship with money is influenced by our parents and our environment.
If you are influenced by family or friends who see money as something that should be saved and invested, you will most likely develop the habit of saving and investing.
On the other hand, if you are influenced by a circle of people who live paycheque to paycheque, have constant credit card loans, and spend ridiculously. Your view of money will be shaped by such.
However, it is necessary I put a caveat here, this might not apply to everyone out there, as there are exceptions to every rule.
As a young adult reading this, it is important we gather enough information about money, how to save, possible investments, and the different ways of increasing your income.
Luckily, this information can now be found easily. Youtube remains the world’s unofficial school. For everything you need to learn, it will be found on Youtube.
Another useful medium I have found is Money Africa.
I have been following them for some months and they offer easy-to-understand financial information for any age range.
They offer both free or paid information about all everything money, simply follow their social media pages for the information.
Plan for the Unexpected.
With the coming of the coronavirus pandemic, this point can not be over-emphasized.
Although the covid-19 was a very unexpected occurrence with the probability of it happening very slim, it still proves the importance of having a safety net for unforeseen circumstances.
I, unfortunately, was among the people who lost their jobs due to the pandemic. The anxiety I felt during that period while I searched for another was very damaging to my mental health.
Looking back, I won’t have gone through much of the emotional stress, If I had kept some cash for the rainy day, while I was working.
Now I try to save up and I have seen a difference, as there have been unplanned bills that needed to be paid.
You might be wondering, how do I save and not spend the money on something else?. Saving does not have to be very complicated trust me.
With the help of technology, there are various personal apps such as Piggy vest, for example, that help you save and gain interest on your savings.
I have friends who brought an actual piggy box to help them save, for with a piggy box you need to break it if you need the money inside.
You don’t have to do this, Most banks also offer student savings accounts to help you save.
The means by which you choose to save may vary, but what is important is you save for unexpected periods.
Trying to keep up with the Kardashians
We all face pressure, it is a given aspect of our generation.
Social media platforms such as Instagram, Tiktoc, and Snapchat, unfortunately, do not make it easier to desire what we see. So it is easy to fall into the trap of spending above what you have to be seen as having what others have.
One way I have been able to curb the pressure of spending above what I can afford is to ask myself if this is a need or a want.
When faced with the pressure to purchase what you see, the difference between these two can get blurry.
We can be confused as to what is indeed a want, and the importance of a need can be overlooked.
To illustrate this, I will use a sneaker.
If I see a sneaker, either in a shop on someone, my first impulse might be to purchase it but I simply ask myself, do I need this sneaker or is it simply a want. Sometimes, even when I do decide it is a need, I still question my purchase to ensure I wasn’t impulse buying.
However, I will be honest, I don’t always succeed at this, I sometimes make impulse purchases, but instances like this are exceptions, not the norm.
Making the effort of differentiating needs and wants, has helped considerably with my spending.
Double-check who you trust with your finances.
This mistake is one that is often overlooked, even by older adults.
Trusting people with your finances include your account officer, investment broker, or financial cooperatives, etc.
There are the people you trust 100% with your money and always the least likely expected source to suspect when cases of fraud are found.
It is unlikely to escape from them like you would a person you run away from like they are carriers of deadly flu, for their services, might be needed in one form or another.
Unfortunately, it is getting increasingly difficult to differentiate who has your best interest.
One sure way Is to double-check every financial plan you get into. If you planning on making an investment double-check with an expert every term and condition. If you incur a loan, double-check the terms, the acceptable payment plans.
Do not act on an assumption, as this is a sure way of getting defrauded.
From experience, once it comes to money people change, so it is best not to be at the receiving end of any repercussions.
If it is too good to be true, it is most likely illegal.
We live in a time when everyone wants to make money. The popular phrase commonly used is “we need to hustle“.
This is a good thing as it shows we are a financially aware generation, but not everyone intends on hustling legally.
This can be seen through the various Ponzi schemes that exist, which claim to offer huge returns on investments to the people who invest.
Many years ago, there was a scheme that was not only popular in Nigeria, but in most African countries, It was called MMM. This scheme promised its ‘investors’ a 30% monthly return on their investments.
Months after it was launched, the owner embezzled all the money and disappeared. The lives of countless people changed overnight, with many resorting to suicide. It was a very rough period.
Sadly, such schemes still exist today, now with slightly different formats on how to convince you to invest.
According to financial experts, true investments do not make financial returns overnight, any financial idea that seems too good to be true, promises unrealistic returns, with no way of seeing how it is done, should be avoided.
Honestly, it is not worth the hassle.
Unfortunately, I have had my share of experiences with such schemes from a friend. I wrote about my experience here.
Focusing on certified investment options will provide the expected financial returns, although with a longer timeline, but with little to no sleep lost in the process.
I hope these few lessons have been helpful.
Do you have any financial lessons you have learned so far? kindly leave them in the comment section, let us learn from them as well.
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