Are all of our money woes the result of economic issues? Not quite. We just don’t always make the smartest decisions with our money. If we hope to build a financially viable future, it’s up to us to make the best decisions we can, no matter what’s happening with the economy at large. Here are fifteen money mistakes we need to stop making to turn things around in the Nigerian setting:
Never borrow money with interest to start a business (except for salary loans); only borrow to grow your business. This is because business takes a long time to gain ground and begin making profit yet for most of the loans you begin paying back a month later or even earlier. Hence, never borrow to start a business expecting that business to be the one to pay back the borrowed money plus the interest.
Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. Do you hear somebody say, “Ezra, come to my office tomorrow at 9 am and pick N2 million’ and you go and buy items on credit hoping to clear when the promised money comes.
If you want to ever save, whenever you receive money ensure you don’t start spending before taking out the savings hoping that you’ll save what remains. Normally what remains is zero. And things to spend on even incite their ‘relatives’, while when money to spend is not available, we naturally find a way of managing.
When you get an opportunity to meet a very wealthy person, never ask for money. Ask for ideas on how to make money. They can even choose to give you money on their own after seeing that your ideas are great. But let getting money from them never be your objective.
Keeping your seed instead of planting it. Many people stop at saving. It’s very, very difficult to save and have all you need to maintain your lifestyle especially after retirement. When you save, your savings are seed; plant it. When you just keep it, some seeds begin to die (eaten by inflation and the likes). That’s where I recommend that you read about the different types of investment you can use to grow savings. I am not necessarily talking about putting the money in a business because you can easily lose money on a business. I am talking about putting it in an investment.
Never lend someone money you are not willing to lose. By the time you lend money, be contented in your heart that should the person not pay, you will not die. You should not even lose the person as a friend. If you realise the person can fail to pay you and you are OK, then lend. If you find you would even hate the person’s entire clan, please advise the person to go to the bank.
Never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money. Do I have to explain that one? No. It’s self explanatory.
Avoid keeping within easy reach money you don’t intend to use in the short term. Don’t, for instance, walk with N100k in your pocket when all you plan to do in a day cost N20k.
Avoid keeping money at inappropriate places, e.g. in socks, under the pillow, in a pit, in the sitting room, in the bra, in a travel bag that you will place somewhere, for instance, when in a bus. You could lose them or they get stolen.
Spending money on an item that you can do without (at least for the time being). These days when I pick money from my pocket, before paying for something I ask myself: What would happen if I don’t buy this? If I find I can live with the consequences of not having that thing, I smile and walk away.
Paying an amount that’s not the minimum you can get that same value for. In other words, why pay N70k for a shoe at Shoprite that you can get at N30k at Behind Mandilas? That’s a money mistake except for those who have achieved financial freedom.
Wanting to be the saviour of the world by helping with everyone in financial need. My sister, brother you are not Jesus. If you find it so hard to say No to a financial demand, you may think you are practising generosity when in actual sense you are attempting financial suicide.
Consistently spending all you earn or more than you earn is like having a drum where you have an inlet that’s smaller than the outlet. It will never get full. And should the inlet ever reduce significantly the drum will run dry. If you do it the other way round and the inlet is bigger, it will get full and even overflow. Hence, we have to always ensure we are widening the inlet while narrowing the outlet – all the time.
Thinking about short-term only and forgetting about long-term or think about the long-term and forgetting about the short-term. What of those who find they are one paycheck away from salary? Are they thinking about the long-term needs? Create a balance.
Don’t expose your success too quickly in life. I learnt that from playing WHOT. Once you just say “Last Card”, you will see your enemies coming out of the woods… You’ll just be hearing Pick 2, General Market, Hold On, etc., as if they never had such weapons before.