The month of June 2021 whizzed so fast and by as I mused on two key areas that are in line with our annual blog theme for 2021, “To New Beginnings 2021”, My Money Anew and a Book Review on “I am my brand” by Kubi Springer, a book that promises everyone who reads it to revitalize their personal brand and live an authentic life proud of who they are.
But first things first, on personal finances.
When I asked my friends this question on a facebook post:
“What advice would you give to someone who hopes to manage their personal finances better?”
These are some of the responses that I got.
“Live below your means ….reasonably also without punishing yourself. You can save some to enjoy. Don’t compete with others.”Dr. Mutindi Kakuti
“Your smallest loan is usually the most expensive. Clear it first.”Akinyi Nyar Otega
“Learn financial discipline, whatever that works for you. Generally it encompasses living below your means, saving for a rainy day/ having a nest fund, avoid loans if you can and when you must take them repay them as soon as you can. If you are self employed, remember that you may not always make the money you are making therefore diversity sources whenever possible.”Wacheghu Wa Mbelegha
“Start now… small steps but start anyway. If it’s saving, if it is budgeting…just start.”Rose Muturi
“Do not underestimate the value of a coin.”Lucy Maru
“Don’t eat your seed money (your investment). Wait for dividends/profit to pay yourself.”Polyne Ongadi
Some common personal finance mistakes that people make include but are not limited to the following:
Living from pay check to paycheck
When one lives from pay check to pay check it means that one depletes or utilizes all the money that one has earned without even leaving any for savings, investment or building an emergency fund. When one lives in such a way even a simple unforeseen problem can be the cause of financial disaster. Missing one salary payment if you adopt such a lifestyle makes life even harder in the economic times that we are living in.
At any given time try as much as possible to have three months worth of living expenses that cushions you from unforeseen financial eventualities. Try not to spend every single shilling that you earn.
Excessive or frivolous spending
This refers particularly to expenditure on non essential items or excessive/frivolous spending on essential items. Little by little is great wealth either created or lost. Ask yourself is it really necessary to eat out every other day of the week? Is that handbag or pair of new shoes really necessary at this point in time? Is that brand of perfume really necessary or can you smell just as good or even better with a less expensive brand?
Whereas most people are experts at keeping tab of essential expenditure such as rent, home (loan) repayments, utilities such as water, gas. electricity, school fees, transport, clothing food many lose out when they do not keep tab of non essential expenditure or frivolous spending of essential items.
Not planning their finances
An old adage goes, “If you do not know where you are going, any route will take you there.” And so it is with our personal finances. Kwambie and her friends and foes alike need to set some time annually, monthly, weekly to plan what they need to do for the financial future they desire.
If Kwambie and her friends plan to work for money for the rest of their lives or be a financial burden to their descendants in their old age they should not invest at all. Investment is getting your money to work for you by putting it into different investment tools and income generating
activities. Fortunately in this day and age there are several routes to financial freedom – investment avenues that take into consideration appetite for risk and the returns thereof and professional financial advisors to hand hold us in the journey.
Can you think of other prudent measures that people put into place or mistakes they make regarding personal finances?
“Wacha niKwambie” June 2021 – My money anew
On personal finances
© Kwambie Nyambane