Adulting comes with the need to build financial fitness. That process is literally no child’s play. It comes with various challenges and trying moments that might get you wishing you could relive your childhood days forever. Braving such days is tough if you have to combine them with financial worries. Wouldn’t it be better to just get started on the right footing? Let’s help you get started.
To Build Financial Fitness, Calculate Your Net Worth First
You cannot be having daydreams of becoming Nigeria’s Farrah Grey when you have no clear description of what your financial worth is at the moment, and how you plan to build up to the dream point. To identify your worth at the moment, you have to value all your assets and subtract your debts — if any — from that value. After which you can set a target net worth for the next 10 years. Don’t be scared that you won’t meet up, even if you don’t meet up with it then — though we believe you would — you would be better off than not working towards it at all.
Make Savings Work
A night out sometimes, a vacation at some point and the likes are advised to maintain a balance as you progress in life. But all these must be done smartly. You would need to always have a budget and target how much you expect to come in, spend and plan to have in your savings for specific periods — monthly perhaps. The best way to keep up with your savings target is to automate them.
“There should always be extra for savings. If there isn’t, cut down your expenses or try freelancing opportunities to shore up income.”
Retirement? Start Now.
With a savings commitment, the next step is to decide what to save for. One important thing you should save up for is your retirement, and it’s never too early to start. In addition to the regulatory Pension Scheme, you can start by saving a percentage of your income, say 10%, for this and increase it with time. Also, discipline yourself not to borrow from this plan to service emergencies — set up an emergency plan for that. Locking up your retirement plan for the next 30 years wouldn’t be a bad idea right? That way, you can retire rich as a baby boy or girl.
Flatmates As Money Savers
Getting a place can be another form of expense while starting up your life as a new graduate. Though you have the desire to admire the beauty of life from the balcony of your own home, it would take building up to get there. Settling to rent comes up as the next option; doing so with a flatmate(s) can save you not just rent costs but day-to-day household expenses. Freeing up some of your income gives you more to save and invest. Check out our article about how to save up for your house rent.
Improve Your Credit Score
Though credit ratings are not quite popular in Nigeria, they are an important way of assessing your financial strength as an individual. One way to assess this is to take up only necessary loans you can pay up for, and commit to paying them on the agreed date. Also, you can monitor this better by tracking how well you service your contributions towards your financial goals just like we help users do with the Cowrywise Savings score.
Starting up your adult life on a strong financial footing is the first step to enjoying a baby boy/girl life as a young adult or retiree. You can start saving and investing here.