Skip to main content

What is financial freedom and how do you achieve it in Nigeria?

Every Nigerian wants to achieve financial freedom. If you don't know how to, here are key steps to financial freedom in Nigeria.

Financial freedom is something everyone all around the world wants to achieve regardless of their economy. Be it big or small. Everybody wants to be financially free and live their best life ever and this list of people doesn't exclude Nigerians. Every Nigerian wants to achieve financial freedom, and you can see the drive for that in how hardworking we are. Even the way we are open to new ways and ideas of making money says one thing. We need, we want and we are striving for financial freedom. Today we are going to see exactly what it means to be financially free, what it takes to be financially free and exactly how to go about achieving financial freedom in Nigeria. 

What is financial freedom?

Ask different people what financial freedom means and you will definitely get different answers. We all see money differently hence, my definition of financial freedom will be different from the next person. 

However, financial freedom can be defined differently but ultimately lead to the same meaning. Like the money fit will say Attaining financial freedom is an objective for most individuals. Financial freedom usually means having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families. It means growing savings that enable us to retire or pursue the career we want without being driven by earning a set salary each year. Financial freedom means our money is working for us rather than the other way around.

Investopedia also added that everyone defines financial freedom in terms of their goals. For most people, it means having the financial cushion (savings, investments, and cash) to afford a certain lifestyle. To have a nest egg for retirement or the freedom to pursue any career without the need to earn a certain income.

15 ways to reach Financial Freedom in Nigeria

Achieving financial freedom in Nigeria won't be the same as doing it in a country with a better economy. Hence, this list is practical, easy and doable for any Nigerian who wants to be financially free. So here are the steps to financial freedom.

1. Set your financial goals

The number one key to financial freedom is setting a financial goal. In life generally, if you should live without setting goals you won't achieve anything. This law applies to your finances.

Start to ask yourself questions like, what are my financial goals? What do I want to achieve financially by the end of the month? In 5 years, this is where and how I want my financial state to be. The moment you set these goals then you start planning how to make them work for you.  

Set achievable financial goals, not goals that will stress you and make you feel like a failure at the end of the day.

2. Know your financial level

You need to know what your financial level is for you you to know how to become financially free. When you know your financial level, reaching financial freedom becomes easy, 

 You will be able to save accordingly, invest wisely, live according to your means and watch your spending. A lot of time even when we know the financial state we ignore it and try to live a life that we cannot afford which is why financial freedom feels so far away.

3. Have more than one accounts

If you only have one bank account at the moment you are doing it wrong and slowing yourself down. You can't save and spend from the same account, it is equal to work done zero.  

Have at least two bank accounts and to be more effective have three separate bank accounts. One account is the major account where you receive your income. Then the remaining two is where you save for emergency fund and for fun. Like holidays, hangouts and miscellaneous expenditures. Make your saving account fixed so that it allows you to save for some time or for your set goals. 

4. Track what you spend

Tracking your expenditure is very simple to do. When you work out with 5000 Naira in your purse make sure there is a reason for that money. That at the end of the day you can account for every kobo spent. 

Working with so much money that you have no plans for will only lead to making unplanned expenditures and you cannot afford careless spending on your journey to financial freedom. I bet you even Elon Musk doesn't spend money anyhow. Be money conscious if you truly want to take your finances to the next level.

5. Spending plan

It is typically called a budget but I don't want to make it sound like a difficult thing to do because in the end budgeting is all about planning how to spend your money.

Create a budget every month according to your income and learn how to live according to your means. 

6. Automatic saving

One major factor affecting financial freedom in Nigeria is very low minimum wages and I understand this very well. I know the most effective way to save money in Nigeria is by automating it. There are two ways to do it. First is by letting your bank do it for you. That is every month they deduct a certain amount to save to your savings account. The second method is by automating it with saving apps. You can see a detailed list of how to save money using saving apps in Nigeria

7. Negotiate/Bargain

As Nigerians negotiating or bargaining as we popularly know it is nothing new to us. So this is just an emphasis to tell you to keep bargaining. It helps you track your spending, reduce your expenditure and save money. Don't just remove the exact amount like you are some millionaire. Bargain and get good deals. It doesn't make you a cheap person, it is just how our market works.

8. Debt pay-off plan

Pay off the money you have borrowed and try not to borrow money. It might sound like I don't know what I am saying as a lot of us are in debt. However, as long as you are not debt-free you cannot be financially free. That is a fact. 

You know how much you are owing people, sit down and write it out, get your total and plan how to pay them all within six months. Only when you are debt-free can you truly start a successful journey towards financial freedom.

9. Live below your means

Living according to your means is not enough to give you financial freedom. You have to learn to live below your means. Living a cheap life becomes mandatory not an option. Remember it is a process, not a permanent situation. The aim is that one day you will be able to afford anything you want but at the moment bring down your standard of living.

This will allow you to save more money and invest in the future. 

Living below you means doesn't mean not eating food, or falling sick and refusing to treat yourself. It simply means when you go shopping if Dano milk is 2500 naira and Lactorich is 3000 naira. Buy Dano, milk is milk and your family will still drink tea. Reduce hanging out always, eat out less and prep your meals to work. At the moment find high-grade second new clothes instead of going to a boutique. Find ways of cutting down your daily and monthly expenditures.

10. Stay Healthy

Staying healthy will keep you away from the hospital. I don't need to go further to tell you what it means but if you don't get it, it means you don't spend money on treating sicknesses and diseases. Hospital bills are not funny, with the current situation in Nigeria to get the proper health care you must spend a lot. So avoid being careless with your health. 

Secondly only a healthy person can hustle. When you are healthy you make money and get closer to your financial freedom. 

Eat clean to avoid typhoid, let your environment be clean to stop malaria, and exercise to keep fit. There are very cheap ways to live a healthy life in Nigeria. Health is wealth and you do not have to be wealthy to be healthy. 

11. Evaluate your career options

This is a scary truth to share but I'll share it anyways. Finding a job in Nigeria is hard and a lot of times we don't even get to practice what we study. So when we are asked to evaluate your career options it means considering changing what you are currently doing and your job entirely.

However, you have to ask yourself some tough questions and answer them. Questions like, while my current job helps me achieve financial freedom in the next 5 years(if five years is your goal). It's my current paycheck going to allow me to save, invest and still afford a normal standard of living? The truth is if your current career can get you to where you want to be financial. Then I advise you to evaluate your available options even if they are a few.

12. Invest

Making investments is the bedrock of financial freedom. When you invest you are literally planning for your future. Have in mind that a good investment is not a make-money quick scam. So when you are ready to start investing please don't fall victim to money-doubling scams.

With the way things are going, make investments that will pay you back in a currency higher than our naira. There are a lot of fraudulent activities out there so before you invest do the background work like your life depends on it. As a matter of fact, it does depend on it. 

13. Emergency fund/Surprise spending

It was earlier mentioned to have more than one bank account. If you missed that point please scroll up and read it. Life is full of uncertainties and one way to plan for it is to be ahead of the problem financially. Always try to save an emergency fund. All emergencies are not bad things. An emergency could be something good that if you don't take advantage of it will pass you. And even if it is a bad situation you will be able to calm the situation.

Having an emergency fund automatically reduces the rate at which you are most like going to take debt. Consider it a necessity for your financial goals. 

14. Maintain what you have

Maintainance is key to saving money and living below your means. You can't afford to be fixing lights, sockets and appliances all the time. Or changing a new phone. I treat my phone like a baby because if anything happens to it now I can't buy a new one. That's the mentality you should have for your properties.

15. Financial Literacy

Knowing books is not good enough knowledge in the times we are in. You have to be financially literate. Start by knowing financial concepts and terms, and then you go on and make your own research to understand everything better. 

Financial Habits you must have

Having the proper money habits is key to financial freedom. So here are some financial habits you must have to succeed in your financial stability journey.
  • Mindful Spending
  • Money discipline
  • laid back lifestyle
  • living below your means 

Wrong beliefs about financial freedom

The first misconception about financial freedom is that you must be wealthy to make investments. Listen if you wait to have money before you make investments you will never make one and you are most like never going to be financially free.  

The next is that people think it is a fast process. Which it is not, success doesn't happen overnight and you have to be patient. Or you end up making costly mistakes.

Things that affect financial freedom in Nigeria

Reaching financial success is a dream that can come through for anyone who truly wants it. However, it won't be fair to not talk about the real problems we face and how they can slow us down.
  • Low minimum wages
  • High rate of inflation
  • Unemployment
The truth is every step shared above can help you face these challenges and with determination, you will get there.

Conclusion...

Financial freedom won't happen overnight. Even if you win a lottery today you are not financially free until you put that money to work for you in a way that 20 years from now you will profit from it.

Hence, get everything right concerning your money and money mindsets and see how your finances stabilize before you realize what has happened. 

Comments

Popular posts from this blog

Saving Money in Nigeria: Reasons You Need a Saving App

Saving money is a little bit different in Nigeria because of many money factors. I mean the concept of saving money is the same you keep some percentage of your income aside every month to save for rainy days or to have emergency funds. however, to save money effectively as a Nigerian you have to save money the Nigerian way. one thing is for sure saving money is a piece of advice we hear all the time and trust me it is the best personal finance advice you can ever receive. but the truth is saving money is not that easy I mean let's tell ourselves the truth. Especially if you are on a low income and the fact is the majority of the people who want to save money because they understand its importance are low-income earners. whether we like it or not this is a money factor that makes saving money difficult and different in Nigeria.  However, the good news is this, if you want to save money you can save money whether your income is low or you have an inconsistent income you can still sa

Financial Literacy Concepts and Terms not Popular in Nigeria

  Photo credit Unsplash With the increase in the number of individuals wanting to be more money conscious and financially savvy. It is not surprising that Financial literacy is becoming a sought after knowledge in Nigeria. Everyone wants to understand what money management is all about and how it can help them grow their wealth. For a fact, financial education is the key to wealth and every Nigerian that I know would want to learn anything that will bring them more money. So today we will be looking at some financial literacy terms everyone should be familiar with and financial literacy concepts we can practice. Financial Literacy Terms Known In Nigeria Financial terms are not different in Nigeria compared to the rest world. These terms mean the same thing any day, any time and anywhere. So let’s know them and include them in our vocabulary.  Asset  An asset is any resource that holds value. It keeps appreciating and rarely depreciate as time goes on. In other words, assets contain a v

How To Do A "No Spend Challenge" in Nigeria

Are there no days you wake up and wish you didn’t have to spend money? Just because you wish you could save more money and stop overspending. Or your reason could be that you are tight on cash at the moment and not having to spend will take off the financial stress for a little bit. Whatever your reasons might be for not wanting to spend money. You are on the right page because there is a solution to your problem and it comes in form of a challenge. The no-spend challenge is here to rescue you.  What is a no-spend challenge? A no-spend challenge is a personal finance activity where you don\t spend money within a period of time as the name implies. The idea behind this challenge is to be able to cut down expenses in other to manage your money better and be able to save money for whatever purpose. The concept is to go for weeks or a month without spending money either on certain things or just completely no spending money. There are conditions behind this challenge that you will get to u