PRACTICAL WAYS TO CHANGE YOUR LIFE ABOUT MONEY
You have heard all the clichés about money – put your money to work for you, spend less than you earn, never spend the principal and use the power of compounding interest. When I gave a talk at a forum in October, one of the young members in the audience said “tumia pesa ikuzoee” i.e. spend money so it gets used to being around you.
It would be best to break smart money moves into three phases of life: when you are in employment; growing your network; and when you are out of employment, and all the while, being smart about your financial transactions in the three phases.
Smart money moves in the comfort zone of employment
The best move is to take care of your health. Even if you have insurance, eat carefully- and never at your desk. Exercise. Take your leave days. Do not go to work if you are unwell and your health practitioner has advised you to take a break.
Learn to work in teams. Learn to understand office politics. Don’t be a gossip, but don’t bury your head in the sand. Develop your style, and live out your principles. Don’t build up or carry stress. Learn to live simply in all areas.
Take free courses if your employer offers. Also, look out for courses that interest you and ask the office to support you. They have budgets for such things. Learn how to speak publicly, take charge of meetings, write minutes and longer reports using the prescribed format.
Two things you should consider at your job: to join the pension scheme, and join a SACCO.
Learn to invest passively, since, while at the office, you are likely too busy to manage and supervise other employees and an outside business. Instead, put your money to work for you, and focus on building your network.
Smart money moves in network building
Volunteer outside and be an active member of your society, whether it’s a sports club, church, school parents group, charity society, industry task force. Try and associate with people and organizations that inspire you. Join industry task teams it is much easier to do when you are inside a company than as a freelancer. It does not cost money, but time.
Smart money moves after you leave your current job
In all your interactions, keep in mind that your next employer or your next client is likely to be someone you have interacted with professionally.
When you are planning to leave your job, assess your bills. Cut out things you do not need. Find a personal insurance plan. Shift your office pension to a personal one. That is your right under RBA rules in Kenya. For other countries in Afrika, find out what options exist for you now and begin to take whatever steps may be necessary. Make it a priority for yourself.
Find a workspace that suits you, away from distractions.
It is easier to tarmac (search for work or business opportunities) over the internet, than in real shoes all over your city. Pubs and coffee shops have Wi-Fi. A coffee cup of USD 2/- is equal to about an hour of free internet. They also have newspapers you can read. The best time to visit is probably mid-morning when they are not too busy. Rotate locations and you may spot someone at a new place. Smile at the waiter and leave a tip.
Other smart money moves to make
- Divorce your bank
Don’t be in a frustrating relationship with a bank. Find a bank that accommodates you; your needs change over time and your bank also changes.
- Give money to your enemy
You can be your own worst enemy if you try to save too easily. If you want to save, automate through a standing order and have the money sent to an account of yours that is difficult to pull money out of.
- Read your statements
Read all of them. If someone emails you a statement (pension, bank, KRA, M-pesa), please take a minute and try and understand every debit (every time money leaves your account). Also study and understand your payslip.
- Take time to resolve issues
Get your credit report, (it’s free). Today, in Kenya, to get a government job needs – several document HELB, CID, Police, KRA clearance, etc. Banks and people make mistakes. They won’t admit it in writing, but they will fix their mistakes. Resolve any outstanding issues, it can make a huge difference for you.
Keep in mind if you join a SACCO, your reward is based on how much you save. If you agree to become someone’s guarantor, pay attention to what they are borrowing for and remember you are the guarantee for the SACCO getting their money back. So, if they default, you may end up paying.
- Learn new skills.
Educate yourself – hundreds of free tools and classes on your phone/online/YouTube. Or take a class in your locale that helps you understand finances and how to manage them.
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The author is a financial writer, and former finance manager and banker. He is also a long-term blogger on banking and finance and a two-time winner of Kenya’s best business blog. He has engaged with several brands to drive the uptake of their financial and investment products in Kenya. He's passionate about capital markets, farming, aviation, and contributes to initiatives that promote African investments, oversight, travel and road safety in Kenya.