Financial Re-education 101: Correcting Outdated Beliefs on Finance

           Personal finance is the art and science of managing your money—earning it, saving it, spending it wisely, investing it, and planning for the future. It is the foundation of financial freedom and stability, and it determines whether you remain broke or become rich. It also determines if you stay rich.

Unfortunately, a large number of Nigerians struggle with understanding personal finance. And the root of the problem is not lack of opportunity, intelligence, or even income—but a strong mindset about money that has been passed down through generations. 

These money habits and beliefs were never properly vetted. Most of them were formed out of survival and emotional decisions, not financial education. So while they may seem to work in the short term, they often lead to financial disaster in the long run.

Here are some real examples to paint a clearer picture.

1. The Yahoo Boy Trap: Fast Money, Faster Crash

Many young Nigerians chase illegal or “fast” money without understanding how to manage it. A Yahoo boy can go from earning millions to being completely broke in just a few years, months or weeks.

Why? The last thing people who come from poverty will want to do is go back. Well, money came before mindset. There’s no budgeting, no investing, no understanding of long-term wealth-building. It becomes a cycle of spending to impress, funding unsustainable lifestyles, and chasing validation. When the money source dries up, there’s nothing left—no assets, no skills, and no backup plan.

2. Rich as Kids, Poor as Adults

At one point in our lives we have heard the phrase “I came from a rich family” or “my father was rich”.

A child may grow up in a wealthy household, but in Nigeria is more of a case of I do whatever I want to do with my money without thinking of their kids. With euphemism this means that the parents can make bad financial decisions that end up hurting their children.

Without learning the discipline of managing money, that wealth doesn’t transfer to the child. Many rich parents become poor because they never learned how to earn, save, or invest money the right way.

They only learned how to spend it. When their are no longer there to provide, they find themselves lost and financially helpless. This is not about what a parent can or can’t do with their money—it’s about financial education.

3. Government Workers and the Pension Illusion

Many Nigerian government workers earn decent salaries for decades. Yet, when they retire, they struggle to survive on a pension. Why? Because they never made their money work for them” No investments, no saving” culture, no or outdated passive income sources that doesn’t provide for the lifestyle they once had. 

Making them to live within their current means right? Well most can’t because they believe they’ve worked too hard not to enjoy themselves so they always spend above their means, leaving them often broke awaiting their next pension. And the spending continues.

4. Small Business Owners Operating at a Loss

   

   Thousands of Nigerians start businesses without understanding how to manage business finances. Many small shops, boutiques, or salons operate at a constant loss but still “look busy.”

 They don’t track profits, separate business from personal money, or reinvest properly. The business looks good on the outside but bleeds dry over time. 

Eventually, the owner burns out, gets into debt, or shuts down the business without ever making real profit. Then guess what? They start a different business! Starting the cycle all over again. The problem is not the business it’s you.

5. The Land-Buying Mentality

It’s common to hear people say, “Once I get money, I’ll buy land.” While buying land can be a good investment, many do it blindly—purchasing in areas that will take up to 10, 15 years to develop. They have no strategic plan for appreciation or cash flow.

Some tie up all their money in land that doesn’t grow in value or generate income. Five years later, they’re still broke, with land they can’t sell because they’ll sell at a loss or develop because they don’t have enough money. Again, the problem isn’t buying land, it’s knowing if you have enough money to live on before the land does appreciate.

6. Religious and Cultural Financial Pressure

Many Nigerians are pressured to spend beyond their means due to cultural or religious expectations—weddings, burials, naming ceremonies, and more.

People borrow to impress, host grand events, and “show face.” These events drain their finances, leave them in debt, and provide zero returns. But because everyone does it, the cycle continues, unquestioned.

Here’s an idea! Why don’t you focus your money on doing things that actually make you rich so when you do decide to show face, you’re pocket won’t feel it.

The problem isn’t always that money is hard to get—it’s that most of us don’t know how to keep it. And until we fix that, we’ll keep repeating the same financial mistakes, generation after generation.

It’s time to rethink everything we were taught about money and start learning what actually works.

So what’s The Way Forward?:

        Now that we’ve seen how poor money habits lead to these guys ending up broke), let’s talk about what the basics really are.

Here are the five core pillars that will help you manage money like someone who wants to get out of the trenches:

1. Know How Money Comes In(Income):

This is basically your starting point. Income is any money you make like salaries, business profits, side hustles, gigs, rent, etc.

 Don’t just focus on how much you make —ask yourself is it enough to fund my current lifestyle for at least 6 months? Is it enough to fund the lifestyle I want? Do I need to make more , how can I make more.

The goal is to build your income or cut your expenses or both, so your income matches your current or desired lifestyle .

2. Budgeting: Control Where Your Money Goes

   

    A budget is simply a plan for how you’ll spend your income. This is very different from a shopping or a party budget.

A personal budget will have your monthly income as your actual budget for the month. Next will be things you normally spend money on like food, clothes, fuel, data, electricity, books, Netflix subscription, etc. 

If you spend more than you make in a month, you're over budget and need to cut unnecessary expenses. Things that deep down you know you can do without. So that there’s more money to go towards his goals.

A simple piece of paper or note yet Without it, money disappears quickly, and you never know where it went.

3. Saving: Build a Financial Buffer

This is important for future emergencies, big purchases, or investment capital.

Nigerians often save what’s left AFTER SPENDING. The key is to SAVE FIRST, spend later. This is called “Pay Yourself First.”

4. Investing: Make Your Money Work for You

We all know that Saving alone won’t make you wealthy—investing will. Putting your money into things that grow in value or generate income, like:

- Real estate

- Crypto currencies

- NFTs

- Stocks

- Knowledge on how to make or grow your

  money

- Starting or scaling a business

- Buying tools that generate income (e.g.,

  camera for a videographer), etc

    These are not luxuries meant for the rich—it’s how they became rich or richer.

5. Debt Management: Use Borrowed Money Wisely Or Not At All

       Not all debt is bad, but uncontrolled debt is dangerous. Personal loans, loan apps, and buy-now-pay-later schemes can trap you in a cycle.

- Good debt helps you grow (e.g., a

   business loan).

- Bad debt keeps you broke(e.g., loans for

   parties or iPhones).

    If the debt won’t help you make more money, avoid it.

6. Knowledge or Skill Acquisition: Learn Before You Earn

     One of the biggest misconceptions among Nigerians is the belief that starting a business automatically makes you an entrepreneur.

People think once they rent a shop, buy commodities, hire a sales boy or girl, and get a notebook —they’re in business. But no knowledge of pricing, profit margins, customer retention, or financial tracking.

If you don’t learn how to run a business or manage money properly—and you don’t hire people who do—you’ll bleed money slowly until it’s gone. Business(entrepreneurship) is a skill. Just like tailoring, coding, or graphic design, running a business requires learning things like:

- Marketing

- Customer service

- Financial tracking

- Inventory management

- Pricing strategy

       If you don’t learn the skills needed, you’ll run the business into the ground—no matter how passionate or hardworking you are.

The same goes for any income-generating activity. Whether it’s freelancing, trading, content creation, or even a 9–5 job, you must continuously upgrade your skills to stay competitive and increase your earning potential.

Personal finance is not a one-time fix—it’s a daily lifestyle. Anyone can learn it, practice it, and grow in it. You don’t need millions to start—just discipline, knowledge, and a long-term mindset.

The earlier you start, the better your financial future.

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