A young professional once reached out to me because he needed help putting his finances in order.
He had just gotten a new job that paid him about ?500,000 a month, and understandably, he was excited about the increase in income. But beneath the excitement was a problem I have seen repeatedly among professionals: he was earning more money, but he did not have a structure for managing it.
We sat down and drafted a budget. We looked at his expenses, his financial obligations and, importantly, his investment portfolio, which he had struggled to build consistently. I suggested simple options he could consider as a beginner, including a mutual fund for emergency savings and a long-term plan that could help him prepare for retirement while providing protection against life’s uncertainties.
I also gave him a simple template he could use every month and followed up to see how he was progressing.
He did nothing.
A few months later, the same young man reached out to ask for financial assistance.
I was disappointed, not because he had asked for help, but because he had already been shown what to do. The problem was no longer lack of information. It was lack of action.
This is one of the biggest financial mistakes I see among professionals: they have mastered the art of earning money, but they have not learnt how to give their money an assignment.
Many people receive their salaries and immediately begin sorting bills, spending and responding to whatever financial demand comes next. Investment becomes something they will do ‘if there is money left.’
The problem is that there is rarely money left.
A salary can increase significantly without a person’s financial position improving significantly. If every increase in income is absorbed by increased spending, the person may earn more but remain financially vulnerable.
This is why every professional needs a budget.
A budget is not a punishment for spending money. It is a plan for telling your money where to go before other people and circumstances decide for you.
One simple framework I recommend is the 50:30:20 rule.
Under this approach, about 50 per cent of income is allocated to needs: housing, food, transportation, utilities, healthcare and other essential obligations.
Thirty per cent goes towards wants: entertainment, vacations, subscriptions, clothing, eating out and other lifestyle choices.
The remaining 20 per cent should be deliberately directed towards financial security and wealth creation. This can include building an emergency fund, investing for long-term goals and preparing for retirement.
The exact percentages may need to change depending on a person’s income, responsibilities and financial goals. Someone supporting an extended family, paying substantial rent or servicing debt may not be able to follow the ratios exactly.
The principle, however, remains powerful: do not spend everything first and hope to save what remains.
Give savings and investments an assignment before the money arrives.
This becomes even more important when your income increases. The first question after receiving a salary increase should not be, ‘What can I now afford?’ It should also be, ‘What can this additional income now build for me?’
Unfortunately, there are several reasons professionals struggle with this.
Some are trying to prove to others that they are doing well. Others are dealing with family responsibilities and what many Nigerians now call ‘black tax.’ Some simply lack financial discipline. Others fall into the dangerous assumption that because money is coming in today, it will always come in tomorrow.
And then there is the issue of financial education.
We were taught how to work for money. Many of us were never taught how to make money work for us.
But knowledge alone is not enough.
You can attend seminars, read books, follow financial experts and understand every budgeting rule available. If you do not take action, your financial position will remain exactly where it is.
The goal is not to become obsessed with money. The goal is to become intentional about it.
Your salary should do more than pay this month’s bills. It should also build an emergency fund, create investments, protect your family and prepare you for a future when your ability to earn may change.
If you are earning a good income but still find yourself financially anxious every month, perhaps the first question should not be, ‘How can I earn more?’
Ask instead:
‘What job have I given the money I already earn?’
Because earning more money without a financial structure can simply give you more money to mismanage.