A friend of mine just got his first “real” job after a mini-hiatus and asked me to share my thoughts on money and how I manage to keep my financial sanity since I work in the financial industry that is notoriously for living la vida loca. Just ask Leo about his character in his new movie Wolf of Wall Street.
Well, here are some of the lessons that I have learned the hard way and also picked up from others:
A budget is the number one that you need in your quest for freedom. It can be dedicated journal, excel sheet or even an app on your smart phone. The most important thing is that you can keep track of your income and expenditure.
Save! Save! Save! You have probably heard it over and over again. This is what separates the children from the youth. Once you develop this habit you will be able to get everything that you need and even want.
My colleagues and I normally say that on pay day , everyone’s bank is always in shock due to the increased credit that we are all eager to reduce the credit to a manageable level. For those of you who get epileptic seizures once money is available, consider making standing orders for recurring payments and also your savings to ease your burden. For frequent M-pesa users should look into using M-Shwari as means of saving.
Diversification is a beautiful that everyone should embrace. Saving is good but do not put all your eggs into one basket. Yes, have that 6 month- one year worth of expenses emergency fund to cushion yourself from your unthinkable but also look into investing in the stock market, assets and chamas (merry-go-rounds).
Insurance should never be over-looked. Apart from the health benefits that are provided by your employer, please invest additional insurance for your family.
Consider, a gradual change in lifestyle. Everyone’s first paycheck is exciting. At least, I know I was over the moon about mine and could not wait to get the ATM to get MY money and spend it as I wished. Spurlge on things that are more worthwhile and durable. One of the best fashion advice that I have I ever received is investing in wardrobe staples. Befriend more solid colours such as black, navy blue, brown especially if you are in the corporate world. Then invest in various coloured blouses, shirts and scarves to give your look an extra -pop.
Bonus #2: Dawn Stanyon’s Professionality has great ideas on how you can mix and match outfits for the work
Bonus#3: This one is for the hard-core. Take the seriously minimalistic route and don’t buy clothes for a whole year!
Look for cheaper ways of meeting them same need. Learn how to cook all those exoctic meals instead of eating out every weekend. Rent a movie instead of watching it at IMAX. Go for second-hand especially for clothes and books. Look out for sales when people are moving out or during a garage sale. Shop in your closet. Give a new lease on your life to some of the things in your home. Be creative with the time and resources at your disposal
For young professionals, the importance of networking can never be emphasized. However, sometimes the opportunity of meeting that person that you would like to connect with will rise at a mixer, conference or event that you can’t afford. Well, Ben Casnocha and Reid Hoffman advise in the Start-Up of You (a.k.a my career change manual) that have an investment fund. Set aside some money in your budget for personal growth whether it’s for attending a TEDx event, Networking In Heels, an out-of-town conference that your budget-strapped company can’t afford or simply buying Bob Collymore coffee at Sankara or a disruptive book within your industry or passion.
The thought of personal debt petrifies me but the older I get, the more I realise that it is a necessary evil. For me, I only use my credit card for medical emergencies and when it’s a matter of absolute necessity, knowing fully well when and how I will pay back.
Know how you will service your loan. For example, some people take loans to purchase or build rental apartments that will bring in rental income at the end of each month. Therefore, the asset pays for itself without straining your other earnings.
In this day and age, one needs multiple sources of income. There is no greater joy than earning money from what you enjoy doing. However, some of us have not fully explored our various talents.Well, Daniel offers a couple of pointers here
Last but not least, educate yourself. There are plenty of information out there to get you sorted. We all love financial guru, Suze Orman and locally, Waceke Nduati-Omanga is leading the way in financial empowerment. You can enrol for classes or following her articles in The Saturday Nation’s lifestyle pull-out