If you walk into any Nigerian market today, you’ll hear the same statement : “Everything don cost.” A bag of rice that sold for ₦10,000 a few years back now hovers above ₦75,000. Even sachet water is no longer five for ₦20, and the internet (data) you’re using to go through this now, has also gone up. Meanwhile, income has barely seen changes in recent years and even the minimum wage just received an increase. Unaccounted money slips away fast before you even realize, most times spent on even the little things.  That’s where financial planning becomes not just useful, but necessary.

Financial planning is mandatory for anyone who wants to be successful —for the student saving for a laptop, the shop owner hoping to expand, the breadwinner who thinks of building an apartment and even the retiree who dreads working in old age. With a good financial plan your money is given back up and direction, instead of letting daily little expenses direct your life . 

What Exactly Is Financial Planning?

Think of financial planning as sketching  a map for your money, putting into consideration where you are, where you want to go and how you plan to get there. 

Through 

• Assessing your financial state.
• Setting goals that are realistic and time-bound.
• Making a genuine budget.
• Preparing for emergencies and retirement.
• Insuring the things that matter the most to you. 

Why Financial Planning Matters 

1. Focus

Many people have and fix goals, but cannot seem to track their spending. Money wasted on things that take them farther from their goals. A plan makes sure you’re not working against your vision. 

2. Shields You from Emergencies

The National Bureau of Statistics reports that over 60% of Nigerians live in multidimensional poverty. For such households, one hospital bill or job loss can collapse the entire family’s finances. A proper financial plan includes an emergency fund, so one setback doesn’t wipe you out.

3. Stress Reduction

Financial issues ranks in the top three of many Nigerians’ problems. Many are scared to check their bank statements because they fear to face the reality of what has been spent. Planning helps you have a mental note of what is going out and coming in, keeping you more in control. 

4. Decision Taking

Plans help you live your lifestyle on what you can afford, through choices based on logic and numbers instead of emotions. 

5. Generational Wealth

A lot more families pass down debts instead of wealth in Nigeria. The people who easily break these cycles do it with sufficient planning. 

Key Elements of a Solid Financial Plan

1. Goal Setting

• Short-term (within a year): Save ₦400,000 for a laptop.
• Medium-term (3–5 years): Buy a plot of land in Niger State.
• Long-term (10+ years): Grow wealth through investments. 

2. Budgeting

Money develops wings and flies away without a budget. A budget helps you confront your bank statements and shows you where every kobo should go.
Tips: 

• List all your income sources— including gifts. 
• Separate needs from wants (nightlife, shopping).
• Assess and allocate percentage for savings and investments. 
• Use tools like Kuda, PiggyVest, Cowrywise, or even a notebook to track.

Example: With ₦300,000 income, you could spend ₦170,000 on needs, ₦60,000 on wants, and keep ₦70,000 aside.

3. Consistent Saving

Don’t wait until your income grows or becomes bigger. Start with what you have. Pay yourself first by saving before you spend.

• Automate transfers into savings apps like the spend and save feature on the OPay app. 

4. Managing Debt

When you borrow with a plan, debt can help. Borrowing for wants and not needs is harmful. Never borrow for luxuries.

• Check out interest rates before you accept any loan.
• Pay off high-interest debts as quickly as you can. 
• Avoid unregulated loan apps 

5. Investing for the Future

Saving alone won’t make you wealth, but investing will. Popular options in Nigeria include:

• Mutual funds
• Treasury bills and bonds: stocks backed by the government.
• Real estate
• Stocks
• Agritech platforms

Example: ₦20,000 invested monthly in a mutual fund at 10% annual returns can grow to over ₦1.3m in 5 years.

6. Insurance

• Health insurance: via NHIS or private HMOs like Hygeia.
• Life insurance: to protect your family.
• Car insurance
• Business insurance: essential if you run a shop or SME.

7. Retirement Planning

Too many Nigerians depend on their children in old age. That’s risky.

• Join a Pension Fund Administrator (PFA) under PenCom.
• Add voluntary contributions or personal savings.
• Consider dividend-paying stocks or long-term property.

8. Estate Planning

If you own land, property, or savings, make plans for these properties too. A will, assign beneficiaries for insurance, appoint guardians just in case. Optimism is not always bad, but planning is better. Also regularly review your plans. 

Common Money Mistakes Without a Plan

• Living paycheck to paycheck.
• Depending only on salary.
• Falling for Ponzi schemes (remember MMM?).
• Borrowing recklessly from loan apps.
• Not teaching kids how to handle money.

Conclusion

In Nigeria’s unpredictable economy, people without a plan remain trapped, while those who plan create stability and wealth. Money without a plan disappears. Money with a plan is a trail to  your future.