In 2020, the world experienced one of the most challenging financial setbacks across critical socio-economic sectors. Nigeria was no different. According to the World Economic Forum (WEF), Nigeria, whose 27% of the productive population (over 21m Nigerians) are unemployed, was further battered by an economic recession as crude oil, her primary export, slumped due to international oil market glut and price cuts.

Reports from Nigeria’s Bureau of Statistics showed that the country’s economy contracted by 6.1% year on year in 2nd quarter 2020. A lot of us went through a great deal of financial difficulties. While some bounced back, others are still recovering, and a considerable number are still in despair, unsure how to approach the new year. One crucial decision to guide our approach into the new year is deliberately choosing to develop smarter financial planning habits that insulate from unforeseen circumstances.

First you need to identify costly financial habits and understand how to avoid making the usual mistakes. These habits include not having an expenditure budget, impulsive spending, overexposure to debts, to mention a few. It might take a lot of practice and experience to develop good financial habits, but the benefits of being responsible with spending are well worth the effort. With finances under control, living becomes a lot more manageable because you will be able to keep yourself and your family debt-free, maintain the lifestyle you want and achieve financial security to guarantee a cushion against shocks.

The question now is, how do you make this happen? You could put a few things in place to help you achieve a healthy financial life, consistently and they include the following:

1. LIVE WITHIN YOUR MEANS
This is the foundation of all good financial habits, and it is not difficult to adopt. Do not borrow to purchase liabilities – if you must borrow to make that simple buy, it is perhaps outside your affordability threshold and you probably do not need it. Avoid schemes that end up stretching your paycheck and always stick to your limit. If you do this religiously, you will experience a dramatic change in your finances.

2. TRACK YOUR SPENDING
If you do not have a budget, you probably do not have even a remote idea of where your money is going. If you are looking to adopt a healthy financial habit, you must know that budgeting is essential. It is the only way you can track your expenditures to proactively identify areas of excess and map out solutions, accordingly.

3. START SAVING
An established savings habit will protect you in the event of a financial emergency, help you pay for large purchases, reduce financial burdens, and provide you with a good sense of financial freedom. Whatever your reason for saving (for a specific goal, emergency fund, retirement, education, property purchase), you need to have a reliable and efficient means of doing it.

4. GET HELP
If these seem too much for you to execute all by yourself, you can always seek the help of financial experts that will put you through, and help you in your journey to developing healthier and productive financial habits.

SOURCE (abridged): https://punchng.com/how-to-plan-against-financial-shocks-in-2021/