It’s not rare to see a tweet made by a young Nigerian complaining about the economy. According to the National Bureau of Statistics, inflation rose to 34.2 percent in June 2024, from 22.8 percent the year before. Every day, the prices of products and amenities double, making living a decent lifestyle more difficult. Now more than ever, money management is important. 

With the opportunities we have (thanks to the internet), being able to handle our finances can determine our long-term financial success. This makes money management skills super important for young adults. 

This article will be a crash course on “Money Management.” It will provide you with practical strategies for saving, investing, and earning more. It will also share solutions that are relatable and practical to living in Nigeria. Lik finance coaches, communities, and companies that are helping young Nigerians build solid financial foundations. This way, you can find help in the right places and live financially free.

What are the basics of money management?

Money Management 101 rests on a basic principle: you need to control how money flows in and out of your life. This includes budgeting, saving, investing, and making good financial decisions. Learning these skills will help you know where your money is going, how much you’re saving, and the type of investments that align with your future.

As a young adult living in Nigeria, money management will help you balance current needs with long-term goals like buying a house, starting a business, or retiring early. Whether you’re a student, a recent graduate, or an early-stage career professional, the principles of money management are universal. You just need to learn them.

How do you get started? First, with budgeting. 

1. Budgeting: the first step to living financially free

Budgeting is the act of giving your money a schedule. It helps you allocate your income efficiently, ensuring you save enough while living within your means. 

To create a budget, follow these steps:

1. Track your income: List all sources of income, including salaries, freelance work, allowances, and side gigs.
2. Track your expenses: Categorize your spending—essentials (rent, transportation, food) and non-essentials (entertainment, fashion). Also track money you give out (tithes, black tax. etc.)
3. Allocate savings: Prioritize saving at least 10-20% of your income.
4. Cut unnecessary expenses: Identify and reduce spending that doesn’t align with your goals.

Some tools can help you simplify budgeting. Notion and good old Google Sheets are great for tracking your income and expenses.

Platforms like Piggyvest help you save and budget through their user-friendly apps. With them, you can save towards specific goals, like rent or travel. These platforms are popular among young Nigerians because they are easy to use, have great support, offer great interest rates, and provide transparency and flexibility.

2. Savings: great for building financial stability

In Money Management 101, having savings is very important. Saving money is more than just putting aside spare change—it requires intentionality. Your savings can be divided into different categories:

1. Short-term savings: For immediate goals such as buying a new iPhone or taking a vacation.
2. Long-term savings: For bigger goals like buying a car, saving for rent, or funding your Master’s program.
3. Retirement savings: Even as a young adult, it’s important to start saving for retirement early. The earlier you start, the more you benefit from compound interest.

Platforms like Piggyvest are excellent for saving. They allow you to automate your savings, meaning you can set a specific amount to be deducted from your bank account daily, weekly, or monthly. This helps you build consistency in your savings habits. The automated feature is great if you struggle with saving manually, and the interest rates can help you grow your savings faster. You can also include a safelock option that will prevent you from getting access to the funds, until necessary. A fantastic choice if you struggle with money discipline. 

Read: 10 Surefire Money Management Tips For Young Nigerian Adults

3. Emergency funds: a must-have

An emergency fund is money set aside for unexpected expenses, such as medical emergencies, car repairs, or sudden unemployment. Building an emergency fund is one of the first steps in money management for young adults because life can be extremely volatile. 

Aim to save at least 3-6 months’ worth of living expenses (yes, you should know how much you need to survive monthly, on average) in a highly liquid account, like a savings account, or one of the savings platforms stated above. Just ensure that you’re able to access the funds when you need them. 

4. Investing: a great way to grow wealth

While saving is essential, investing is how you grow your money. Once you have consistent saving habits and you’ve built a solid emergency fund, you should explore investments.

There are many opportunities for young Nigerians to invest, thanks to the rise of digital platforms and easy access to financial information. Here’s a breakdown of the most popular investment options:

1. Stocks: Buying shares in companies listed on the Nigerian Stock Exchange (NSE) or global exchanges can provide long-term growth. 
2. Bonds: These are low-risk investments that involve lending money to the government or corporations in exchange for interest over time.
3. Real estate: Real estate can be a great way to build wealth if you can afford to buy property. Alternatively, some platforms allow you to invest in real estate projects with small amounts.
4. Mutual funds: Mutual funds pool money from various investors to buy a diversified portfolio of stocks and bonds. This can be a safer option for beginners.

The key to investing is to research thoroughly, and then invest in companies with strong growth potential. Platforms like Risevest and Piggyvest make the investment process easy by creating portfolios on behalf of their users. You can take advantage of them especially as a beginner investor. They also allow you to put your savings into low-risk or higher-return investments, depending on what your risk tolerance is. 

Investing is a powerful tool for creating wealth, and learning to invest wisely is a great way to manage your money as a young adult. 

Read: Investing 101: How to Invest Your Money as a Creator

5. Investing in yourself: a better pathway to wealth

In addition to investing in stocks and bonds, another great way for young Nigerians to manage their money wisely is by investing in their growth and development. This can be done through the following avenues: 

1. Entrepreneurship: Starting a business, whether a side hustle or a full-time venture, is one way to earn more money. Identify a gap in the market or a need within your community, and leverage it. Many young Nigerians have succeeded in fields like tech, fashion, or digital marketing by selling a service or product. With the rise of e-commerce platforms like Selar, it’s become a lot easier for young people to make money online.
2. Freelancing: Platforms like LinkedIn, Indeed, Fiverr, and Upwork give you the ability to connect with others and get access to freelancing opportunities in writing, graphic design, web development, and social media management. These platforms help you to earn in foreign currencies that are often at higher rates than you would find locally.
3. Affiliate marketing: With your phone, internet connection, and basic sales skills, you can earn commissions from brands by promoting their products or services. Affiliate marketing is one of the easiest ways to make extra money online, especially for beginners in Nigeria. Selar has a robust affiliate marketing platform that you can explore. Read more here. 
4. Professional Development: Invest in yourself by acquiring new skills or certifications that can increase your earning potential. Upskilling through online courses or mentorship programs can significantly boost your career trajectory and income, making you an asset in your field. Don’t be caught in the work trap, take some time to upskill. 

Platforms like Coursera and Hubspot offer online courses that can be used to boost your professional portfolio and learn valuable skills. A lot of these courses are free so be sure to research and explore. You can also request financial aid and significantly reduce the cost of taking them. 

Read: How to Start Affiliate Marketing in Nigeria

6. Communities and coaches: learn how money works

Navigating the finance world can be challenging on your own. This is where finance coaches and communities come in. Learning about personal finance doesn’t have to be a solo journey. Joining a community is a great way to stay motivated, and learn from others’ experiences.

Communities like Money Africa are making financial education accessible to young Nigerians. Money Africa organizes meetings that cover budgeting, saving, investing, and debt management. These communities also offer accountability, encouraging members to stay on track with their financial goals. When you talk with other people, you can be inspired to make smarter money decisions.

Finance coaches provide financial guidance, helping you build tailored money management strategies that are based on your income, goals, and risk tolerance. Coaches like Xoreni and Financial Jennifer often share insights on social media platforms, making financial literacy more accessible to young Nigerians. They focus not only on teaching money management skills but also on helping clients shift their mindset toward wealth-building and long-term financial success.

7. Debt and gambling: a slippery slope

Debt can be a significant financial burden, especially when not managed properly. As part of your money management skills, you should understand the dangers of bad financial habits like gambling and borrowing money from loan sharks. 

Gambling is the art of staking something of value to an expected outcome. While some forms of gambling are legal in Nigeria, it can quickly become a bad habit that will ruin your finances. A lot of people take loans to service their betting addictions and may even take to committing crimes.

If you do take on debt, let it be for a productive purpose, like funding your education or starting a business. Always have a clear plan for repaying it, and avoid high-interest loans where possible. Financial communities and coaches often provide tips on avoiding unnecessary debt and can help you navigate repayment.

8. Discipline: great for sustaining wealth

The cornerstone of all these money management strategies is financial discipline. Whether it’s sticking to a budget, regularly saving, or making strategic investments, financial discipline is what ultimately determines your success. In Money Management 101, mastering the skill of delaying gratification is key.

Instead of spending impulsively, disciplined savers and investors think about their future. Tools like Piggyvest can assist with automatic savings, but the real work comes from building strong habits that keep you committed to your financial goals.

Wanna learn more about money management?

Mastering money management as a young Nigerian is not just about saving money; it’s about making strategic decisions that align with your long-term goals. By using the right platforms, coaches and communities, you will have the tools and resources to start building wealth and securing your financial future, even amid the economic uncertainty. 

We have partnered with Piggyvest to write a detailed guide on how to manage your finances as a creator. This e-book teach you how to master your income streams, invest smartly and secure your future. It will also show you real-life case studies and examples to illustrate these concepts, ensuring you have the tools to create a financially secure future for yourself as a creator—all at no cost to you.