Broker shares ways to bolster financial stability

Hey there, time traveller!
This article was published 04/02/2025 (276 days ago), so information in it may no longer be current.

As the financial landscape continues to evolve, individuals must equip themselves with sound money principles to navigate economic uncertainties, inflationary pressures and investment opportunities, investment broker Sifawu Usikalu told the Sun.

These core principles, she explained, serve as the foundation for financial success, urging individuals to adhere to them in 2025.

One of the fundamental principles of financial stability is ensuring that expenses remain lower than income.

Individuals must cultivate the discipline of spending less than they earn to avoid debt and build financial security, she said.

“Living within your means is not just a suggestion — it is the cornerstone of financial independence,” she said. “Individuals should create and adhere to a budget that prioritizes needs over wants while regularly reviewing spending habits to maintain control over finances.”

Another critical principle is prioritizing savings before spending. Usikalu explained that many people struggle financially because they save only what remains after their expenses.

“Paying yourself first means that as soon as you earn, you allocate a portion to savings or investments before covering any other expenses,” she noted. She recommended automating savings into a separate account or retirement fund to instil consistency in wealth accumulation.

Understanding and leveraging compound interest is another essential money principle. Usikalu described it as “the most powerful tool for wealth building,” adding starting early allows money to grow exponentially over time.

“The earlier you start saving or investing, the more time your money has to multiply,” she explained. “Individuals should maximize the benefits of compound interest through investment vehicles, such as retirement accounts, savings accounts, and diversified portfolios.”

Regarding diversification, the analysts warned against putting all financial resources into a single investment. “The age-old wisdom of not putting all your eggs in one basket still holds true,” she said. Spreading investments across different asset classes, such as stocks, bonds, real estate and other ventures, helps reduce risk and creates a more resilient financial portfolio.

The responsible use of credit is another vital principle. Usikalu emphasized that while credit can be a valuable financial tool, it can quickly become a burden if mismanaged. “Your credit score is your financial reputation; maintain it wisely,” she said. She advised keeping credit card balances low, paying off debt in full each month, and making timely payments to maintain a strong credit history.

Long-term financial planning is indispensable, according to Usikalu. She stated that financial security is not achieved overnight, but requires consistent planning and execution. “Your financial plan should extend beyond the present and account for future needs, such as retirement, education and major life purchases,” she advised. Setting clear financial goals and regularly reviewing them ensures individuals stay on track and adjust strategies as necessary.

Safeguarding assets through proper insurance coverage and legal measures is another crucial principle.

“Insurance is your financial safety net,” Usikalu said. She urged individuals to ensure they have adequate health, auto, home and life insurance policies in place. Additionally, estate planning can help protect wealth and ensure financial security for loved ones.

Avoiding unnecessary debt is paramount to financial freedom. Usikalu cautioned that debt can become a heavy burden, limiting financial flexibility.

“Not all debt is bad, but it must be taken on for the right reasons — education, a home, or a business investment,” she explained. Those who take on debt should have a clear repayment plan to prevent financial strain.

Financial literacy remains a key driver of informed decision-making.

“Money management is not just about earning — it is about understanding how to grow and protect your wealth,” Usikalu said. She encouraged continuous learning through books, courses, financial news and consultations with trusted financial professionals to stay ahead of economic trends and opportunities.

Finally, Usikalu highlighted the importance of giving back to society.

“Wealth is not just about accumulation. It is also about making a positive impact,” she said. Allocating a portion of income to charitable causes or community projects fosters fulfillment and societal progress. Mentoring others in financial literacy, she added, can help create a more financially aware and responsible community.

» aodutola@brandonsun.com

» X: @AbiolaOdutola