Hi Everyone, we're back again and in this
video; I'll be giving you your personal money
management checklist!
5 things you should be doing to gain greater
control and have better success with your Finances
[music]
Understand your psychology of money
 
What is money to you? I still remember when I first took a money
profile test and suddenly many of my habits
and weaknesses made so much sense.
To you money may mean freedom like it did
to me, but it may also mean status, power
or even love.
Your money profile is what you believe about
money; and we all know that our beliefs shape
the way we live.
The way we save, spend and share money is
shaped by our beliefs and our attitudes toward
money.
Self-awareness in this case is very important
to taking greater control of your Financial
life.
You can find one of these tests in the description
below.
Knowing why you behave the way you do is usually
the first step to improving and become a better
steward of anything. Step two. Have an entrepreneurial spirit
There was a time when the word ‘hustling’
had a negative connotation attached to it; but those
days are far gone; most people now recognize that
having an entrepreneurial spirit is a positive
attribute.
Firstly, this entrepreneurial spirit is not
limited to business; it may even be within
your job.
Go the extra mile, try new things, innovate,
put yourself out there and be diligent.
There’s a quote that says ‘if you’re
willing to do more than you’re paid to do,
eventually you will be paid more than you
do.
This also applies to not remaining stagnant
in your field; in a years time, how will you
have invested in yourself so that you provide
more value?
Maybe you can study a course, there are lots
of free courses online, and YouTube is a university
in itself, you could do a certificate, a Masters
or any other relevant or useful thing, to
add more value.
Take risks and invest in yourself.
Even outside of the job environment, make
time, sit down and write down the skills and
natural talents that you have, and put some
serious thought into how you can leverage
on those skills and talents to earn you some
extra income.
There were stories earlier in the year of
people who had unfortunately lost their jobs
and started businesses, which were now making
them 50,000 shillings a month baking.
These were things they could have been doing
on the side anyway; but it took an emergency
to open their eyes to these opportunities.
And remember not all opportunities are glamorous;
Thomas Edison once said opportunity is missed
by most people because its dressed in overalls
and looks like work.
Three. Save and Invest.
This is advice you've  probably heard 1000 times but didn’t follow or don’t
follow even now.
But some money principles don’t change,
and this is one of them.
I think, or rather I hope everyone understands
the importance of saving and budgeting, but
just because you’re saving doesn’t mean
you’re saving correctly.
And that’s what we’re going to talk about
today.
If you’re saving what’s left; you’re
not saving correctly. If you’re income is
increasing and your savings are not, you’re
not saving correctly. If by ‘saving’ you
mean ‘not using’ that is its just unused
cash in your MPESA or your wallet or even
some bank account earning you 3% interest
per year; you’re not saving correctly.
Firstly, you should always save then spend.
Allocate a percentage of your income to savings
and then live on the rest.
The greater the % the better.
Second, don’t buy into the lie that the
more you earn the more you’ll save, saving
is not about how much or how little you earn.
Wisdom says if you’re faithful with little;
you’ll be faithful with much and the inverse applies.
 
This also applies when your salary inflates;
your lifestyle should not inflate proportionally,
don’t fix what’s not broken.
You were probably fine.
First, allocate a percentage to savings and
where necessary, spend the extra money where
you may not have been able to before.
Third, be intentional with increasing that
% of your savings.
Let’s give a practical example, if you spend
KES 250 a day on lunch, add that up and that’s
90,000 a year.
Let’s say you even cut that in half and
say I won’t eat out for lunch half of the
week.
That’s 45,000 shillings extra that you have
at the end of the year which you can channel
toward something else, why?
Because you were intentional; you sat down
and budgeted and cut out all the unnecessary
costs.
This year you won’t be wondering how all
these people can afford those December holidays
in Kilifi; because you were intentional, and
you channelled your spending toward what will
be more valuable to you in the long-term.
Lastly on this point is where you put your
saved funds.
And this is so important.
This is the difference between 1 Million and 30 Million kshs
if you haven’t watched our video on Compound
interest, now is the time to do that.
I can be saving 100 kshs every month and you
are saving 10,000 kshs every month; but depending
on where we put our money, in 30 years my
100 kshs could easily supersede your 10,000
kshs a month, this is so important; again,
where are you putting your savings?
Many people feel intimidated by the concept
of investing because of all the jargon that
involved: Cost to Equity, Leverage ratios
and they feel that it will take a lot of time
for them to learn that, but you don’t need
to know all that in order to invest well.
One thing you can do is invest in assets that
you can forget about.
Buy a portfolio of shares for the long-term
and forget about it for the next few years.
Don’t know what shares to buy?
Look at our Stock recommendations created
by people whose first language is investments,
elect a Relationship Manager for 1,000 kshs
a year and have them do it for you.
And then put it out of your mind.
Or find another asset, that you can invest
in and forget about, one that you don’t
have to consistently monitor and evaluate.
On the other hand, if you do want to learn
there are a plethora of affordable and valuable
ways for you to do so.
Classes out there like Abojani, Centonomy,
or even the NSE which offers trainings; or
and of course this channel which aims
to simplify investing and educate and enrich you.
 
Learn and grow yourself.
Normalise speaking about money.
Normalise speaking about money in ordinary
conversation.
Not just your Chama or Investment group.
And when I say speaking about money, I mean useful and edifying conversations about Finances. Unfortunately this has not yet become part and parcel of
ordinary conversation, and this needs to change.
Especially for younger people; when was the
last time you had a chat about Finances?
Do you even know if your friends budget?
What were the last investment opportunities
you discussed together?
And to the older generation, when was the
last time you sat down your children, or your
nieces and nephews and had a chat about Finances,
helping them avoid the mistakes that you may
have made.
Money needs to be a normal part of our conversations;
because it’s a normal part of our lives.
If others are not intentional about it; you
take that first step.
Ask your aunt you look up to out for lunch
and have a conversation about Finances.
Have that trusted person that you run your
business ideas by; or investment ideas.
Sometimes they’ll tell you; yeah that’s
a fantastic idea; other times they’ll tell
you, this may be less glamorous, but it’s
the better route to take, lets normalise mentorship
when it comes to Finances. There is so much to be gained,
let’s take that step today.
Have an emergency plan
An emergency is a serious, unexpected negative
occurrence.
I emphasise unexpected because there’s a
temptation to believe that tomorrow will go
the way today went.
It’s as if people, myself included expect
an emergency to announce when its on its way.
Or on the other hand we expect that its something
that happens to ‘other’ people.
I think 2020 has taught us that we honestly
don’t know what tomorrow holds and its only
prudent to plan for emergencies.
It may be prudent for you to have at least
a few months savings in case of job loss or
other medical emergencies.
Can you live at the basics of your lifestyle
for a few months off of your savings?
Accessible emergency savings is definitely
something you need to think about.
And by accessible I mean money that’s not
tied up in a savings account where you need
to give 3 months notice to get it out; or
in a plot, or you’d have to sell your car,
no.
By accessible I mean, that you’d be able
to access it, if not today, then within 3
days time.
Start slowly building that emergency fund
today.
So that’s it!
That is your Personal Money Management Checklist.
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