- Pay yourself first - set up a direct debit every month that takes money from you pay packet straight into a savings account, and make sure the money is difficult to access. This way you won't be tempted to dip into it every time you reach a minor financial hurdle in your life.
- Work on saving up an emergency fund that can cover your living expenses for at least 6 months in case you suddenly find yourself out of a job.
- If you are going to go into debt, do it for the right reasons. Borrow only to finance appreciating assets. For example, don't borrow a lot of money to buy a brand new car because the value of that car will start depreciating from the moment you drive it off the dealer's lot. Do borrow money to buy land (even if you don't yet have the money to start building on that land), or to get an education which will ultimately increase your net worth in the job market.
- Invest in the stock market through mutual funds as it increases your residual income. That is, you are still making money without much personal effort (from what I gather, it's a bit like receiving royalties as a writer, or a musician, etc.).
- Start your own small business on the side - a restaurant, video rental shop, etc. - that can help bring in extra income.
Saving effectively and spending wisely - input from those who are doing it and doing it well
Here are a few tips I garnered from several young successful Africans living both at home and in the diaspora:
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