My personal finance lesson in January
Sigh! Happy Belated Birthday to me! Welcome back and Happy 2018 to my fellow financialistas.
“People who work hard for money without financial literacy are like a group of women in dry areas walking for miles in search of water and coming home to empty it into a drum that has a leak.” Amos Ngahu
I always feel nice when i interact with great minds, those who have made it in life, those who have the urge to tell you where it all started and how much they have made it in life. It gets even sweet when it has something to do with my personal finances. There are several people out here (me included) who are just hungry to be educated on how to manage their finances and when i get that opportunity i feel like i have achieved one of my life goals because then, i will have to share it with my fellow financialistas in my blog.
So last week on Tuesday in an entrepreneurship class. You know in such classes you always expect to be taught on the best businesses in the world, which ones are trending, which CEO is getting the highest salary in the whole world, GDP of such businesses just to be knowledgeable and in that case pass exams. I experienced a different entrepreneurship class this time, full of people expressing their life experiences in the line of business and the lessons they got from their income thereafter. I felt like i need to literally face some of this challenges for me to learn and actually get up and do something with my personal finances.
Here are some of the things that i learnt.
Remember God gives you the opportunity to get the little cash that you have to manage it and to invest in it. Appreciate every little finances that God gives you through tithing.
I used to know paying yourself is going out with friends, buying your favorite dish and eating alone, taking a cub to and from work (yet i have written about paying yourself before). When paying yourself ideally means Money that should never leave you for the rest of your life. This simply means investing in your money on a regular basis, and instead of getting that money back you actually get some of the personal benefits like loans, medical cover, education, life insurance etc. It encourages saving and borrowing.
Know your Net-Worth
One of the biggest ways to respect your money is having your own financial year and calculating your net-worth after each year. This is how it is calculated.
- List your assets
House XXX Helb XXX
Land XXX Sacco XXX
Saving-Sacco XXX Banks XXX
-Personal savings XXX Mobile-Mshwari
Life Cover XXX -Tala XXX
Car XXX -Shylock XXX
Pension XXX Car loan XXX
The difference between your Assets and Liabilities is your Net-Worth.
How much do you save in day
Note all your expenses per day. Ask yourself what can you do to get 500 shillings in day (not necessarily 500). List your expenses from the highest cost to the least and chop off the irrelevant items. For example a short walking distance doesn’t need a ‘matatu’ for 10 shillings and spending a lot of money on purchase of an item when you can get a similar one or better one at a cheaper cost.
Lastly: Be an entrepreneur of your own-self, find something you can do work on it and earn from it. I love my entrepreneurship class, it does not only lead me towards passing my exams but it equips me and opens my mind to becoming a better person in future.
There is a lot you can do with your finances, all you need is hard work, determination, self-confidence, diligence and the urge to learn and being cautious with your finances.