10 Major Budgeting Habits That Keep Nigerians Poor & The Right Way to Budget

 

     When You budget like a millionaire when you’re monthly salary is ₦100k!, You’re really budgeting like someone who wants to stay broke forever. Be honest – do you actually know where your money goes?

         Budgeting is a very important financial skill that determines whether you become rich or stay poor. Many Nigerians unknowingly have poor budgeting habits that keeps them poor . Doubting? Here are some common budgeting mistakes that you make without even realizing it!

1. Lack of a Budget Plan

   The biggest mistake is not having one in the first place which Many people do. This leads to buying mostly on impulses, overspending and financial instability.

It’s so simple to Create a written or digital budget that contains your income, basic expenses, savings, and investments to track expenses.

2. Living Above One’s Means

A common mistake is spending more than what you make, either to keep up with the latest trends, your friends, society or a particular image/reputation. This leads to having a lot of debt … high chance , it won’t end well 🤷🏼‍♀️

You don’t need that iPhone when you’re rent has not been paid. Set spending limits, and avoid buying that ₦200k wig you know you don’t really need, until you are financially stable. Ladies, Sometimes let breeze touch your skull, rock that all-back, it won’t k!LL you!

3. No Emergency Fund

Do you like looking for people who will borrow you money anytime there is an emergency. Stop taking unnecessary debts.

 Have an emergency fund for rainy days. These situations are unexpected, that’s why it is a continuous process not a one time thing. An amount of income comfortable with you. You can end up saving 3-6 months’ worth of expenses!

4. Borrow-Borrow

Live paycheck to paycheck, relying on salary, or loan apps with high-interest rates, creates a cycle of perpetual debt that is almost impossible to get out of.

Instead of borrowing for food, rent, significant other(bad debt), build a saving habit by Planning major expenses in advance and consider multiple streams of income to reduce money troubles.

5. Ignoring Savings & Investments

     A budget for only expenses is not a budget. Don’t ignore savings and investments.

Always allocate a portion of your income to savings and exploring investment options to grow wealth over time.

6. Not Tracking Your Expenses

If you don’t track your expenses, it’ll be hard to know where your money is going and you’ll eventually run out of money before the month ends.

Monitor your daily, weekly, and monthly spending. You can use your microfinance apps or notepads, to see what you’re spending on and adjust where necessary.

7. Failing to Budget for Irregular Expenses

Asides a budget for monthly bills, there are also irregular expenses(quarterly, yearly, etc) like school fees, rent, car maintenance, or festive spending, that left unaccounted for can lead to financial stress.

8. Not Budgeting for Self-Development

Many people spend money on liabilities(cars, clothes, jewelries, etc) but fail to also invest in courses, books, professional training, networking events, or business knowledge that will increase their earning potential.

9. Not Having a Budget for Giving & Charity

     Generosity is different from giving beyond your means, leading to financial strain. Don’t help others if it compromises your financial goals. When you have achieved your goals, you would be in a better position to help anyone you want.

10. Lack of Financial Goals

      If you don’t know what to do with your money, you will end up spending money on random things that aren’t really needed

When you have goals like buying land, starting a business, or retiring early—and align your budget with these goals. You would end up saving a lot of money along the way.

      Budgeting is not just about reducing your spending; it’s about having control and planning for future success. By using these budgeting tips, you can avoid money troubles and build lasting wealth to afford both your needs and wants.😎

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