Financial Intelligence Series: Article Two

I used to think that saving was overrated. I was one of those many people completely sucked in and enslaved by the rat race, I thought that my only saving Grace was going to be a bigger job, with bigger perks, and an even bigger salary. More than that, I was waiting for that one big project that would make me a millionaire, and then I would invest my money and be financial free for life! Don’t get me wrong, I am not balling and flying in private jets. However, over the years I have learned a thing or two.

Any financially free person will tell you that it does not happen overnight. It has to be a deliberate effort by you. It requires a lot of commitment, persistence, and a long term outlook. It trickles down to every daily detail of your life, your attitude and your outlook.

Rule number one; Do not underestimate the importance of saving.

Someone once told me that in India, people there are very deliberate about their savings that they will even take 100 shillings to the bank. Kenyans do not have a savings culture and I believe this to be one of the major reasons we are poor. The recent FSD survey depicts how Kenyans in all the provinces, except north eastern, live way beyond their means. Someone jokingly added that it’s because they do not have a Westgate shopping mall there.

One of good friends told me a story of how he decided for a whole year, to keep a coin jar. He collected coins and at the end of the year, he had saved 52,000 Kenya shillings in coins. I told him I have to try this one by the way. Most of us don’t value coins; we throw them around as tips, buy sweets, or just don’t try to keep track of them.

Rule number two: Live without Personal Debt

One of my mentors in this area says that the purpose of debt is to embarrass the borrower. If you are a fun of the book of proverbs which was written by the very affluent king Solomon, he outlines various pitfalls of borrowing. However, I must put a disclaimer here which is thanks to my husband who is also a financial consultant. When you borrow to finance an asset or something you can easily sell of to repay the debt in case you are not able to keep up with repayments, then that is excusable. However, if you borrow to finance your lifestyle and then you enslave yourself to a paycheck for the next decade, you are selling your own destiny. This is the reason why there are so many employed people with big dreams but they never get the chance to take a risk because they are enslaved to their paycheck.

Rule number 3: Set financial goals

You do not know what to accomplish if you do not set goals. Start with a realistic objective for your money. Then go about actively engaging yourself in making sure that you achieve it. If you want to own a house, start saving to buy land. Set a goal. Do you need 500,000? What else do you need to do to get some extra money to help you achieve your goal?