Handling Money in Your Twenties
everything don cost, what should we do?
A recurring theme in the media we consume: songs we listen to, movies we watch, conversations on social media, etc. is the importance of money. In High, with Davido, Adekunle Gold opened the song with: “love is not enough baby, come to me m’olowo.” In Money & Love, Wizkid asserted that his “pocket is full of money, [and his] heart is full of love,” and in Mavin special, Won Da Mo, Rema asked his love interest, “baby girl, why are you crying? clean your tears with my currency!” Whether we like it or not, money matters. It is the oil that smoothens the wheels of our daily lives and makes us sexier in the eyes of the public. Everybody loves money and the people that have it.
And yet, many of us lack a good understanding of how to deal with it. We know money is important, and maybe we're starting to learn how to get more of it into our hands, but keeping and growing it is something we're still learning.
Well, the truth is, it’s not our fault. Educational institutions don’t teach us these things. We spend years in school, learning Pythagoras’ theorem and whitewashed history, and not enough time learning how money flows. To make matters worse, the economic clime we’re in is the toughest it’s ever been for young people. We’re standing at the edge of a global recession, countries all over the world are tailoring their coats for rainy days, tech conglomerates we looked up to like modern Messiahs have been letting go of people like crazy, and we cannot afford to buy houses at thirty like many of our parents could.
So where does this leave us, and what can we do?
Honestly, if I had all the answers, I would have gotten a penthouse with three balconies in New York by now. But I don’t. All I know is that while handling finances in your twenties can be very challenging, it's also an important time to develop good financial habits that will set you up for long-term success.
And so here are a few tips I’ve learned:
Invest in yourself: This is my go-to money advice for people our age, anytime any day. If you’re living in Nigeria, you already know what the state of our currency is. There’s no money anywhere, banks are closed, financial apps are not working, and the Naira is currently devaluing against the Naira. Last week I withdrew 5K cash and paid 1K for it, so how much can one save, really, at this stage of our lives, and how much would it be worth at the end of the day?
This is why I believe that investing in your education, career, and personal development is the best way to spend your money as a twenty-something-year-old. Read. Buy books. Do you want to learn a skill? Use your money to buy a course. Want to become a content creator? Invest in a tripod or a lightbox. Want to build a career as a Designer or Software developer? Invest in an online course. This helps you increase your earning potential so that, eventually, you’d be able to make other financial decisions (like investing in stocks, real estate, shares, etc.), which will set you up for long-term success.
Live Within Your Means: This is one of the hardest things to do and also something I struggle with. The silver-eyed delight that comes with earning money as a 20-something-year-old means that you may have access to many of the things you didn’t as a kid. Consequently, I find myself buying things just to experiment. '“What does it taste like?” “What would I look like wearing this?” Experiencing new things gives me great pleasure, and while there’s nothing wrong with that, sometimes I might overspend more than I really should. Therefore, learning to live below what I earn is a skill that will save me in the long term, and will save you too. Yes, pleasure is important, but financial security is much more!
Create a budget: This goes in line with the previous point. One of the best financial decisions you can make is to create a budget and stick to it. This will help you to understand where your money is going and help you save enough for any long-term goals you might have. My mom is a huge advocate for budgeting, and she always discovers interesting things by doing so. I recall her deciding to get a wifi modem after realizing how much she spent on data in a month, and this decision has paid off nicely. Living on a budget will teach you more efficient ways of getting things done.
Avoid debt: Especially when there’s no plausible means of repayment in sight, and when it’s unnecessary (because deep down, you know that you don’t need to borrow money to buy a new outfit for a party where the entire room will be dark). If you have any outstanding debts, such as student loans, make paying them off a priority. High-interest debt can be a significant financial burden that one can carry through life, and it's best to eliminate it as soon as possible.
Build an emergency fund: It's important to have a cushion of savings in case of unexpected expenses or emergencies. I read somewhere that we should aim to save at least three to six months' worth of expenses in case of job loss or other unexpected events. I don’t know how possible this is for many of us, and I know it’s hard because money no dey, but it’s better to try than to not try at all. Also, if possible, try saving in dollars, especially if you have long-term goals in sight and you wouldn’t need the money anytime soon. Apps like Piggyvest, Risevest, and Invest Bamboo can help you do this with ease.
Learn Financial Literacy: You cannot be a master of anything you don’t know. Thankfully, the internet has brought a lot of the knowledge we weren’t taught in school to our doorstep. I follow Money Africa on Instagram, a financial education institution that makes it easy. I also joined their student community so that I could learn on a deeper level how to use money and make it work for me. It pays off, my dears. I also follow blogs that teach these things. Here are a few you can learn from: Muhammad’s Newsletter and Money Lemma.
Start Investing in Assets: Don’t wait till you’re in your late twenties to invest in stocks or take advantage of financial markets. Invest in assets that have the potential to appreciate in value, such as stocks, real estate, or small businesses. The earlier you start investing, the more time you have to let your investments grow and learn how to invest better.
In conclusion, your money matters, so take it seriously. The best approach for you to take will largely depend on your specific circumstances and financial goals. Don’t allow anyone to pressure you. I saw this Naira Life article about a babe who has been saving crazily, and omo as much as I admired her, I also knew that I didn’t want to live like her. You can only enjoy your money while you’re alive, so enjoy it. Try things just because you can. Buy that new cereal box because you’re curious about what it would taste like. Visit a new country because you have always wanted to travel. But remember that there is a tomorrow that might come, and when it does, you will want to be prepared enough to face it.
If you can, consult with a financial advisor that will take your specific needs and circumstances into account before you make big decisions with your money.
That’s it for this week.
Rooting for you as always!
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Media I consumed this week:
Reading: A Broken People’s Playlist by Chimeka Garricks. Trying to read more African fiction this year, and so far so great. I cried when I read the first story, it felt like a nightmare. Good stuff.
Watching: This week I watched King of Boys with my mother, and I really enjoyed rewatching it. I also watched Crash Course in Romance, a K-drama about a star lecturer who has trouble eating food, and the mother of one of his students, who owns an eatery. You can imagine where that goes. Next week I will focus on rewatching classics: Inception, The Godfather, The Matrix, The Dark Knight. I want to know what I loved about these movies growing up, and how they hold up to my current realisation of self.
Listening: Been listening to a lot of Alte music lately. Really taking it one artist at a time. Currently on Show Dem Camp. I want to learn where they came from, and how they have evolved through the years. I think music tells a beautiful story of growth if you really listen. I am also listening to Let’s Talk Shop. The episode on Loyalty was amusing and insightful.