Managing money in the current economic climate can be challenging, especially for young Nigerian adults just starting their financial journey. High inflation rates, unemployment, and the rising cost of living make saving and investing difficult. 

However, mastering money management early can set you up for a lifetime of financial stability and success. Whether you’re a student, a fresh graduate, or early in your career, learning how to handle your finances effectively is super important.

In this article, we will share ten surefire money management tips for young adults, specifically tailored to the Nigerian context. 

First, what does great money management look like?

Great money management involves understanding your financial situation, setting realistic goals, and creating a plan to achieve those goals. This means living within your means, avoiding unnecessary debt, and building a solid financial foundation for yourself. 

For young adults, this includes budgeting, saving, investing, and being mindful of spending habits. Effective money management helps you avoid financial stress. It prepares you for future opportunities and to withstand challenges when they come.

Ten surefire money management tips for young adults

1. Track your spending

Knowing where your money goes is essential for effective money management. Track your spending to identify areas where you can cut back and save more. Use apps or a spending diary to record all your transactions. This practice helps you become more mindful of your spending habits and makes it easier to stick to a budget.

2. Create a budget and stick to it

A budget is the most important part of good money management. Start by listing all your income sources and expenses. This includes rent, transportation, foodstuff, light bills — whether generator or electricity, black tax, enjoyment costs, and your savings. 

Use budgeting tools or apps to help you track your spending. Tracking your spending will help you stick to your budget. Adjust your budget as needed to reflect changes in your income or expenses.

3. Build an emergency fund

An emergency fund is a savings account, specifically set aside for unexpected expenses, like health emergencies, sudden job loss or unforeseen gadget repairs. Aim to save at least three to six months’ worth of living expenses.

Start small so you’re not overwhelmed but make it a priority to contribute regularly to this fund. Having an emergency fund provides a financial safety net and reduces the need to rely on credit or loans.

4. Avoid unnecessary debt

Debt can be helpful to get through big financial milestones, such as paying for education, buying a car, or starting a business. However, it quickly becomes overwhelming if not managed properly. Avoid taking on unnecessary debt, especially high-interest debt like credit cards. 

If you already have debt, create a repayment plan and prioritise paying it off as quickly as possible. 

5. Save for short-term and long-term goals

There’s a difference between saving for your short-term and long-term goals. Your short-term goals could be a vacation or a deep freezer while long-term goals include things like paying rent or a retirement plan, depending on how long you are looking at. 

Open separate savings accounts for each goal and automate your savings to stay consistent. For long-term goals, consider investment options that offer higher returns than regular savings accounts.

PiggyVest shares specific features in their app that can help with your savings goals in our ebook. Download here. 

6. Invest wisely

Investing is often overlooked by young adults on their journey to building wealth. Start by educating yourself on different investment options, such as stocks, bonds, mutual funds, and real estate. 

Find an investment strategy that aligns with your goals and risk tolerance level. Remember, investing is a long-term commitment, so be patient and avoid making impulsive decisions based on market fluctuations.

Read: How to invest your money as a creator

7. Live below your means

You’ve probably heard the saying ‘Cut your coat according to your cloth’. This timeless advice perfectly encapsulates the importance of living within your financial means. Living below your means is a key principle of money management for young adults. This means spending less than you earn and avoiding lifestyle inflation. 

Prioritise your needs over wants, and find ways to enjoy life without overspending. This could involve cooking at home instead of eating out, shopping for sales, or finding affordable entertainment options.

8. Find jobs with benefits

It’s important to think ahead about your future. This includes retirement planning. Retirement might seem so far right now but saving now gives your money more time to grow. Look for jobs that offer pension plans and healthcare benefits. Regular contributions now can lead to a more secure financial future later on.

9. Educate yourself on personal finance

Knowledge is power when it comes to managing your money. Invest time in learning about personal finance through books, online courses, podcasts, and workshops. Stay informed about financial trends and best practices. The more you know, the better equipped you’ll be to make informed financial decisions and avoid common pitfalls.

10. Take advantage of free financial guidance

Take advantage of free financial guidance with our new ebook, “Managing Your Finances as a Creator” with PiggyVest. If you’re feeling uncertain about your finances or need help mapping out a financial plan, consider tapping into this valuable resource. 

In it, we share practical advice on the importance of savings and smart investment practices tailored specifically for creators. Learn how to manage cash flow effectively, create a diversified portfolio, assess risks, and implement effective pricing strategies.

This ebook includes real-life case studies and examples to illustrate these concepts, making sure you have the tools to you need to create a financially secure future for yourself as a creator—all at no cost to you.