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    Wednesday 18 November 2015

    Victims or perpetrators of financial slavery

    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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