The Nigerian Youth Investment Fund (NYIF) was set up as an initiative of the Federal Ministry of Youth and Sports Development (FMYSD) and funded by the Central Bank of Nigeria (CBN) to invest in youth ideas to build sustainable businesses that can activate enterprise and increase job opportunities in Nigeria. The fund is dedicated to investing in the innovative ideas, skills & talents of Nigerian youths aimed at turning them into entrepreneurs, wealth creators and employers of labour, contributing to national development.

The plan targets young people between the ages of 18-35 years and details the needed actions required to support business establishment, expansion and consequent employment creation for youth in critical economic and social sectors.

Forget everything and focus on one thing: MONEY MANAGEMENT

In this blog post, I would like to address one of the most important factors, habits, plans, or whatever you fancy calling it. It’s the topic that you would rarely see people discussing it, and even people who do discuss it, hardly ever practice it and that might make you wonder at times whether the topic of money management isn’t a sacred practice.

Have you ever thought about getting better with your money? If you have ever wondered how rich people manage their money as I have; or maybe you do not come from a wealthy family like myself but want to become wealthy, then this blog post might be just right for you.

We are talking about acquiring wealth by creating a system that we will constantly improve and follow with discipline. It is a set of basic rules that we create and follow, which will eventually lead to a set of habits that will create wealth for us in the long run.

Needless to say that a proper money management system is not only important within your personal finances but it is twice as important when it comes to Forex Trading. In this article, we will focus on the very basic aspect of Money management and that is the money management in personal finances.

MONEY MANAGEMENT IN PERSONAL FINANCE:

PLAN YOUR BUDGET: 

EMERGENCY FUND: 

As you go along you will find that you have already created the emergency fund in the first step, however, this is actually where all the fun begins. It is said that an emergency fund should be enough to cover up to 6 months of your living expenses. Imagine an unpleasant situation that would occur and you might lose your job, and all of a sudden that would immediately affect your net income. With the recent example with the Coronavirus, people who have already established money management before the Health Crisis, should be well off and secured during the pandemic as they certainly have the Emergency fund to cover the difficult times.

Moreover, if you have already devoted enough for the emergency fund, keep going. As I said, this is actually where all the fun begins. Once you have secured your finances with a sufficient amount for emergencies, keep devoting 20% of your net income further for savings.

GET RID OF DEBTS:

Getting rid of your debts is good because just as your savings have compound interest, your debts have (most of the time) an interest rate too! However, it is important here to distinguish the good debts from the bad debts. Now you are wondering how debt can be a good debt? Well, good debt is a debt that generates income for you. The important keyword to be remembered when it comes to a good debt is an asset. So imagine you had an opportunity to take a loan from the bank to buy a house on mortgage or leasing and you would use that house to rent out to people and you would acquire some kind of return on investment. That is considered good debt. A debt that would eventually lead to a capital gain over time.

Bad debt, on the other hand, is a debt that takes away money from you that you will never see it again. Basically any type of spending that doesn’t create any value in terms of return on investment but rather eats-off of your cash. The important keyword for it is a liability. It is your credit card, your car, things that require maintenance fees, etc.

PLAN FOR YOUR RETIREMENT:

 Once your investment runs steadily and you would acquire more money, or you might not necessarily acquire more money but you will have a habit of putting aside 20% of your net income, it is then up to you to decide what you will do with that money. Whether you decide to invest further into stocks, in education, or just simply securing a future with your spouse, that is purely based on your decision. However, if you don’t know what else to do, you can plan your retirement. There are plenty of options on how you can secure your retirement, but the most important thing to remember here is compound interest. I will not dive deep into this topic, but long story short, it is basically interest on an investment that already has an interest in it.

HAVE SOME FUN: 

Last but not least, go out and have some fun from time to time. It is important to reward yourself with the fruits that you have taken the effort to acquire to keep you motivated. Understanding that we are humans is crucial and as robots need maintenance from time to time, we need a break as well. So go spend some of your hard-earned money on that new suit, watches, or whatever you fancy.

THE FINAL NOTE: 

In this article, we have covered the importance of money management in real life. Money management is nothing else than a process of planning, budgeting, distributing, spending, and saving a person’s finances. It is important to incorporate these habits into your daily life in order to achieve your financial goals in the long run. If you are not born into a wealthy family (like me), or if you are not married to a wealthy family (like me as well), chances are you will need to implement money management eventually.

As you have noticed, money management is a nice theory for creating wealth by distributing your finances correctly into different jars. However, in order to consistently follow the set of rules you have laid out, it will take you a lot of discipline and self-awareness.

The good news is, by focusing on money management you can potentially eliminate some of the psychological barriers such as emotional attacks. Moreover, Psychology decides 80% of your success rate especially when it comes to Forex Trading.