Nigeria’s economic landscape has faced significant turbulence in recent years, characterised by rising inflation, high unemployment, fluctuating exchange rates, and growing poverty levels.

According to the National Bureau of Statistics (NBS), over 133 million Nigerians live in multidimensional poverty, while inflation hit 26.72 per cent in September 2023. In such challenging times, proactive personal finance strategies are crucial for survival and stability.

Dr. Ngozi Okonjo-Iweala, Director-General of the World Trade Organisation, emphasises the importance of financial adaptability, stating, “Financial resilience is not just about surviving; it’s about creating the capacity to adapt and thrive.” With this mindset, Nigerians can take control of their financial futures by following these research-backed strategies.

Create and Stick to a Realistic Budget

A budget is a cornerstone of financial management, especially during economic uncertainty. The Central Bank of Nigeria (CBN) highlights that households that actively track their spending can better manage rising living costs.

• Focus on Essentials: Prioritise food, rent, healthcare, and transportation over discretionary expenses.
• Track Your Spending: Leverage budgeting tools like Cowrywise, PiggyVest, or Excel spreadsheets to monitor income and expenses.
• Cut Back Where Necessary: Reduce non-essential spending on luxuries such as eating out, subscriptions, or entertainment.

Financial literacy advocate Arese Ugwu, author of The Smart Money Woman, advises: “Budgeting is the foundation of financial freedom. It forces you to confront your reality and take control of your money.”

Build an Emergency Fund

An emergency fund provides a financial buffer during unexpected crises such as medical emergencies or job loss. The Nigerian Economic Summit Group (NESG) emphasises that financial buffers are critical in mitigating economic shocks.

• Start Small: Even saving ₦5,000 or ₦10,000 monthly can make a difference over time.
• Use High-Yield Savings Platforms: Apps like Kuda and VBank offer competitive interest rates, helping your savings grow faster.
• Automate Savings: Set up automatic transfers to ensure consistency in building your fund.

Personal finance expert Bola Sokunbi, founder of Clever Girl Finance, advises, “Even if your income is small, saving something—anything—consistently is better than saving nothing at all. Small steps build momentum.”

Manage Debt Prudently

Debt management is critical, especially when inflation and interest rates are high. Proshare’s 2023 survey revealed that over 60 per cent of Nigerians struggle with loan repayments.

• Avoid Predatory Loans: High-interest loan schemes often worsen financial stress.
• Focus on High-Interest Debt: Pay off debts with the highest interest rates first to reduce financial strain.
• Negotiate with Creditors: Contact lenders for repayment plans or renegotiated terms.

Financial coach Uche Ahubelem says, “Debt can be a useful tool, but only when it’s well-managed. Don’t let short-term fixes compromise your long-term stability.”

Diversify Income Sources

The unpredictability of Nigeria’s economy makes it risky to rely on a single income stream. The NBS noted that 80 per cent of Nigerian households experienced income declines during the COVID-19 pandemic, underscoring the need for diversification.

• Start a Side Hustle: Consider ventures like e-commerce, freelance work, or agriculture.
• Upskill for Better Opportunities: Platforms like Coursera and LinkedIn Learning offer affordable courses in in-demand fields.
• Explore Remote Work: Tap into global opportunities via platforms like Upwork, Fiverr, or Toptal.

“The best way to secure your finances is to create multiple streams of income. Even small side hustles can make a big difference,” says business coach and author Steve Harris.

Protect Your Investments

Investment fraud is rampant in Nigeria, with over ₦300 billion lost to Ponzi schemes between 2016 and 2022, according to the Securities and Exchange Commission (SEC). Careful planning is essential to protect your wealth.

• Stick to Regulated Investments: Focus on low-risk options like Treasury Bills, Mutual Funds, and ETFs.
• Diversify Across Sectors: Spread your investments across agriculture, technology, and real estate.
• Be Skeptical of High Returns: If an investment promises returns that sound too good to be true, it likely is.

Financial analyst Olumide Adesina warns, “In an economy like Nigeria’s, where fraudsters prey on desperation, due diligence is your best defense.”

Invest in Financial Education

Financial literacy is essential for making informed decisions. The CBN’s 2021 report revealed that only 35 per cent of Nigerians are financially literate, leaving many vulnerable to poor financial choices.

• Use Free Resources: Platforms like MoneyAfrica and Smart Money Tribe offer practical financial education.
• Read Financial Books: Books like The Richest Man in Babylon by George S. Clason provide timeless financial wisdom.
• Join Financial Communities: Engage with groups or attend seminars to stay informed and motivated.

“Financial education is the single most powerful tool you can use to change your money story,” says personal finance educator and author Nimi Akinkugbe.

Plan for the Future

Despite the challenges of the present, it’s crucial to plan for the future. A 2023 PwC Nigeria report highlights the importance of aligning financial goals with realistic expectations.

• Set Clear Goals: Define short-term (e.g., paying off debt), medium-term (e.g., saving for a house), and long-term (e.g., retirement) objectives.
• Invest in Retirement: Contribute to pension schemes or open a personal retirement savings account.
• Seek Expert Advice: Consult a financial advisor to optimise your financial plan.

The future is uncertain, but the best way to prepare is by taking deliberate steps today. Your financial future depends on the decisions you make now.”

Conclusion

While Nigeria’s economic challenges are significant, they are not insurmountable. By creating a realistic budget, building an emergency fund, managing debt, diversifying income, and prioritising financial education, individuals can protect themselves and thrive despite adversity.

As Dr. Ngozi Okonjo-Iweala aptly put it, “Adapting to change is the cornerstone of resilience.” By embracing these strategies, Nigerians can secure their financial well-being and navigate uncertain times with confidence.

Dr. Amana is CEO of Rich Aunty Finance, a leading financial literacy and fund management company.