Helen Njeri @njerihelen
Warren Buffet, an investment philanthropist and CEO of Berkshire Hathaway once said that someone is sitting in the shade today because someone planted a tree a long time ago.
In his book, Rich Dad, Poor Dad, Robert Kiyosaki observed two diverse opinions on investment: one by his rich dad and the other by his learned but poor dad. He stresses on how the rich traverses the terrain of making money, retaining it and passing the wealth on to their generations.
However, notable is the gap left by the conventional education. Schools and colleges don’t teach you how to manage money. Graduate workers immerse themselves in unwise investment practice which often leads to poor quality of life. But just because you didn’t learn good money practice does not mean you can’t learn them now. Here are some tips you can follow to get better at managing money.
1. Spend time on personal development
Time will go by anyway whether you invest or not. If you never start that venture, then you will just be older without growth, or any gain. As one investment philanthropist said: “The most important investment you can make is in yourself.” Reading educational books or audio recordings are an awesome resource to build your knowledge and expertise in investing and money management skill. Attend seminars and workshops to expand your knowledge and consequently give yourself the opportunity to meet and interact with like-minded individuals who may be even potential business associates.
2. Be a conscious consumer
Walking around the shopping mall should not only be for leisure, drop by a popular store and compare prices, also check up on to the online shop, This will help you to have an idea of the price trends and offers available. Incorporate the good coupons and deals available while planning for your regular shopping. Track your every dime as you spend it. Don’t “sleepwalk” through life. People who don’t do this quite often find their money tends to just evaporate. It takes time to look for coupons, make lists of expenditure and search through bank statements, but it is worth it and makes a great deal of difference.
3. Make a budget and stick to it
When planning to visit the grocery shop, do you have a checklist ready in your basket? Can you account for your money on day-to-day basis, or the amount you spend on clothes, shoes, grooming or airtime? Are you the kind of people who are always praying they may not overdraw their accounts? If so, make a budget and stick to it.
Go through your expenditure over the last one year and study your spending habits. You can eliminate impulse buying by having a list of most important items and their projected amounts.
4. Have a plan and a vision
Research has shown that most people avoid financial planning due to the feeling of it not being urgent or a priority, perception of “I am too poor” or distrust of financial planners. At the end of it all, many will ask themselves “Where did my money go?” But this question comes when it is too late in life. Well, you should not.
To avoid this, have a financial plan and follow through it. You can start with having objectives set; your objectives should have a timeline or deadline by which you want to achieve results. An example of an objective is maybe “To buy a home by 2020” . This is then followed by a strategic action to achieve the results.
You can have more than one strategy, for example to “open a different savings account”. Also have an insurance savings plan targeted at helping you achieve your goals and a way to monitor your achievements.
5. Think like an investor
To see your nest egg expand, you must think like an investor. Think about it, the wealthiest people in the world did not wake up and find a bundle of dollars in their accounts or worse still, they did not just save $500 (Sh50,455) a month and leave it at that. Of course not! They learned how to turn that $500 a month into $1,000 (Sh100,910). Then $10,000. Then $100,000. And so on. You get the point. Learn how to grow your money. Invest in bits and observe so you can adjust accordingly where it works. Having a mentor, even if they might not know you personally helps in learning about their achievements, follow them on social platforms to adopt their ways.
6. Work with your partner or spouse
One of the biggest conflicts in marriage and relationship is money. If you are married or in a relationship, teach your partner to be open about money and intended goals. You can invite a financial consultant and have synchronised financial goals. Remember they say “unity is strength” and “two are better than one”. Bringing your energies together will form a united front strong enough to move insurmountable challenges. But if nothing else you need to make sure that the two of you have the same financial goal and vision and that you actually stick to it.