Strategies for avoiding debt and building wealth in 2023

Welcome to February!

Ahhh, I know the feeling when you survived the 45 days of January.?

I won't be surprised, if you are already counting down to the end of February.

The usual excuse abi?

Bills everywhere, and the money was not enough...

Many years ago, I learned that the feeling that my income was not enough wasn’t dependent on how much I was earning, but on what I was doing with what I earned.

When I learned these lessons, my finances changed.

Let me tell you a story about Seun.

Seun started his career as a customer service representative with a salary of N50,000. He took the job hoping that he could save some money for his master's degree.?

Three months into his job, someone from the head office of the company informed him of a cooperative program where he could save money and earn some interest monthly. So he decided to set aside N20,000 monthly from his salary for saving, signed a direct debit and no access to the account for the first three months.

Every other month, he worked to get additional bonuses to augment his expenditure. During the period, though he lived with his parents, he still had to pay bills like DSTV & Light bills which were about N7,000 at the time.

When his salary was increased to 70k, he increased his savings to N40,000. Now you might be asking, how did he survive with just N30,000 monthly in a city like Lagos??

Here are some things that helped him;

• Staff bus - this means that he spent almost nothing on transportation.
• Free airtime from his place of work

At the end of two years, he had accumulated about N450,000 with interest accounting for N50,000. By the end of his first- four working years, he had bought two brand new laptops, two televisions, a land in Sango Ota, and one Naija used car that he used to learn how to drive.?

All these are on a salary of 50k - 70k. So it baffles me when you say that you don't have money to save.

7 tips for avoiding debt and building wealth in 2023

Be smart, be like Seun, delay gratification and start building wealth using the tips below

1. Create a budget: One of the most effective ways to avoid debt and build wealth is to create a budget and stick to it. This will help you to see exactly where your money is going and identify areas where you can cut back. Click here to access a?simple template for budgeting
2. Live within your means: To build wealth, it's important to spend less than you earn. This means avoiding lifestyle inflation and living below your means, even if that means making sacrifices in the short term.
3. Pay off high-interest debt: High-interest debt, such as credit card debt, can be a major obstacle to building wealth. Prioritize paying off this type of debt as soon as possible to free up more money for saving and investing.
4. Invest for the long-term: Investing in stocks, mutual funds, or real estate can be a great way to build wealth over time. However, it's important to have a long-term perspective and not to get caught up in short-term market fluctuations.
5. Save for emergencies: Having an emergency fund can help to protect you from falling into debt if you face unexpected expenses. Aim to save at least 3-6 months' worth of living expenses in case of an emergency.
6. Automate savings: Make saving automatic by setting up automatic transfers to a savings or investment account. This way, you'll be less likely to spend the money on impulse purchases.
7. Continuously educate yourself: Keep learning about personal finance and investing to stay informed on the latest strategies for building wealth.

By following these tips, you can avoid debt and build wealth in 2023. It's important to remember that building wealth is a long-term process and requires discipline, patience, and a commitment to making smart financial decisions.

The understanding of what you do with your income will determine if you will ever build wealth or continually go broke month-on-month, always hoping for a better job to change your state.?

My advice is don't succumb to pressure of the society to live above your income. Even the Holy book admonishes that one should plan, save and keep inheritance for future generations.?

Achieve financial wellness with Mkobobank, click here to download the app and start automating your savings.

Do you have any other tips to share? Let us know in the comment section below