I recently signed up
for a financial literacy training of trainers and my expectation was to acquire
valuable skills and knowledge that I could use for my clients and beneficiaries
but I was shocked to learn that I was in dire need of the very skills that I
thought I already knew and was implementing in my life.
Financial literacy is
about equipping people with skills, knowledge and confidence to manage their
personal and family’s personal finances. Although many of us have the basic
knowledge and skills on financial management, we are not keen on continuously
applying these principles to our finances. I know how i ought to manage my
finances but I don’t always manage them the way I should making myself both a victim
and perpetrator of poor financial habits.
We all interact with
money right from childhood into adult life even in the African culture. It is a
common norm for people to offer money to the new born baby as a way of blessing
them. Psychologists have further noted that even children have the instinct to
recognize money on the basis of how the grip currency compared to other things
offered.
Knowledge is power
and this principle cuts across all spheres of life including finances. Many of
us have an idea about how much we earn and probably how we spend it but how
many of us actually track each cash transactions that happens in our lives? We
keep cash books for our businesses and companies but forget to do the same for
our personal and family finances. It is one thing to have the right knowledge;
it is another to be able to rightly apply that knowledge.
Financial management
requires discipline, consistency and adaptation. I have lost count of the
number of time I have set out to track my finances and even set up cash flow
systems but only to abandon them a couple of days later. This is a familiar occurrence
for many of us and we are victims of our own financial literacy. We suffer avoidable
losses because we don’t want to spend time doing the things that can actually
liberate us to financial liberty.
A common trap is the
ability to differentiate between our needs and wants. It is interesting that
the older we grow up, the more the line between needs and wants becomes blared.
We had a very heated discussion about the topic during the training over issues
like mobile phones, airtime, fitness activities and social gathering whether
they are needs or wants. We realized that while the basic needs of humanity are
clear for all of us, the secondary individual needs are not clear for many of
us. Poor financial habits are developed when we turn our wants into needs
because then we spend on things that we ought not to spend on.
Part of financial
management is having the right order of priorities for your needs and wants
list. As adults we need to be reminded of the things that really matter in life
before we get carried away by the monthly pay cheques and regular incomes. There
is no better way to manage finances other than having a spending, saving and
investment plan. The question is how many of us have these three tools
operational in our lives?
If you are like me,
these facts should be a wakeup call for you to put your financial systems in
order before it is too late. The best time to start managing your finances is
now. Recognize the gaps in your financial habits and be intentional in
addressing those gaps by managing expenditures, increasing savings and
maximizing investments.
So are you are victim
or perpetrator of financial slavery?
Now is the time to
start making a difference in your finances by adapting better and more
effective approaches.
Noeline Kirabo
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