Hey Blogfam

Trust we are all doing great and following hard after all the Lord has placed in our hearts.

So today’s post is a personal finance post.

I am in my 20s although I am yet to decide if my age is included in the mid-twenties or late-twenties, whichever part of the spectrum that I belong to, the crux of the matter is that I am in my twenties and I have people within this age bracket make mistakes with their money. 

I have seen young people make a lot of mistakes with their money in their twenties.

The twenties for most of us is the time when we finish our first degree, and start working on our first jobs, it is the first time most of us have access to a monthly salary aside from the regular upkeep our parents sent to us during the undergraduate days.

So for some of us, we tend to indeed have increased access to money but with the access comes another problem, not being able to know what to do with the money, and thereby making some avoidable mistakes.

Even if you are not in your twenties, do keep reading because you'll learn a thing or two, so without further ado, let’s just right into today’s post;

1.    1. SPENDING ALL YOU EARN

The twenties are the years that most often than not, you still live with your parents, with little or no bill to pay for yourself, you are fed during the hours you are at home, and others even have the luxury of taking lunch to work, so in a nutshell, you aren’t spending your money on shelter and food, the only one might be on the clothing, and the monthly cash you give to your parents per month.

It then becomes a thing of concern when after one year of working, a young man in his twenties doesn’t have a healthy percentage of his income that hasn’t been spent on frivolities.

While this is not to judge you because I know that sometimes life happens, make sure you are not making the mistake of spending all your earnings. It's a big mistake. 

2.    2. NOT SAVING & INVESTING ON TIME

This is closely related to the first point.

If there is another mistake people in their twenties make, then it is the mistake of not saving.

One of the excuses young people in their twenties give for not saving is that; ‘The money is not enough.

It’s funny how a young person will claim that his/her salary is not enough when he doesn’t pay the rent for his house or have people he is feeding.

While I know that some people reading this might be in their twenties and are already married meaning that they already have to pay bills and cater to the wellbeing of their family, even then, you still have to save a portion of your income.

Ask any finance-oriented person you have around you, and they will tell you that if you start saving and investing the money saved in a high-interest account that gives say a 10% per annum, and you start doing this by the time you are age 25, if another friend starts saving and investing in the same account at 35, the young person who started his saving and investing at 25 will have a minimum of 30% more than the person who started at 35 years old, sometimes even more than 30%. It's called the power of compounding, and to truly enjoy this power, you need the years. 

You don’t want to save because you think the money is not enough, but if you look closely into your life, you’ll realize that there are some frivolities that you spend money on that are totally unnecessary. Make a list of the things you spend your income on and see for yourself. 

If after looking at your list, you realize that all the things you have on the list are essential, now may be the time to start thinking about what else you can do to increase your income which will help you save.

I am from the Yoruba tribe in Nigeria, and they have an adage which I'll translate loosely; the money a young boy makes first is used in the purchase of mundane things. This doesn’t have to be you, you can use the money you have access to now for things that truly matters to you which will continually yield into your 30s, 40s and beyond.

If you think you have no need for money at the moment and hence you don’t need to save, I’d tell you that it is better to have money saved and not need it, than to need money and not have money saved. The latter is not a good place to be at all, and I am sure you don’t want to be there. So, don't make the mistake of not saving moving. 

 

3.   3. THINKING YOU HAVE TIME

Another mistake that people in their twenties make is thinking that they have time, it is true that you still have the advantage of time ahead of you, it is also true that the clock is ticking and time waits for no one. 

I celebrated my birthday about two weeks back, and I was telling a friend how I couldn’t believe it has been almost six years since I left the university. I mean it still feels like yesterday. It only drives home the point that time waits for no one.

If you don’t start doing what needs to be done with your finances while thinking that you have time, you might just suddenly wake up one day only to discover tomorrow is your 40^th birthday.

Yes, you still have the advantage of time, but ensure that you are fully maximizing it.

 

4.   4. INVESTING IN THINGS YOU DON’T UNDERSTAND

A look at the statistics of those falling for the get-rich-quick schemes are majorly people in their twenties.

One of the mistakes you can make as a person in your twenties is putting your income into a business idea or an investment opportunity that you do not fully understand, it can cost you a lot.

The advantage of the time that you have is a good thing here because, for whatever that happens in your twenties, you can always still scale through and come out at the other side of the tunnel stronger, but even with the advantage of time, it is best you only put your money in the things you understand. 

You don't want to lose three years' income on a business idea that goes bad. 

This does not mean that you should be totally risk-averse, who will never put money into a business unless you understand it 100%, of course not. There is a need to understand whatever you want to invest in to a large extent, and after you have done your due diligence and you feel comfortable with your decision, by all means, go ahead. Balance is the key here. 

5.   5. NOT INVESTING IN KNOWLEDGE

My first degree was in Microbiology, this is to show you that I don’t have a background in the money world, and even if you have a degree in Accounting, most of the things you were taught were the theoretical part of managing money or how to manage funds for the government and not how to make,  manage and multiply your own money. 

In the real world now, you’ll have to seek the knowledge that can help your finances. That you are reading this Blog Post shows that you are interested in your financial life.

And to fully understand all things money, you will have to read books, watch vides, subscribe to finance communities and keep learning.

Don't take a passive role in the matter of your personal finance, take an active one. The person you will look at on your 50th birthday (if Christ tarries) will thank you for it. 

As a recap, the mistakes for you to avoid are; don't spend all you earn, start saving and investing on time, don't think about the time you have ahead thereby procrastinating on what you need to get done now, don't invest in the things you don't understand, and keep getting all the knowledge you can that can help your finances. 

So, there you have it, and I am sure you got a thing or two.

See you next week Thursday by God's grace.

There Is So Much Light***

 

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