We recently concluded our seven-module series on understanding financial literacy. I hope you followed through it. If not, I’ve got great news, I’ve compiled the major lessons in each module in one article, for you to see them all at a glance.
- Understanding the Tool Called Money: As good as money can be, to pay our bills, afford us a life of comfort and convenience and the likes, the obsession and excess pressure for wealth is rather undue and can be harmful in the long run. Money should not be used to determine your self-worth or fulfillment , validate your value or measure success. Likewise, money is not a tool to relay your fears or avenge yourself of the inadequacies and wants you had when growing neither is it a tool for competition. These are emotional issues that should be addressed with or without the presence of wealth. Money, instead, should be used to finance your wants, needs, comfort and convenience. It should be a tool to create impact, enhance impact and create recurring income as a legacy for your generation.
- Controlling the Now: Financial literacy is not limited to those who earn tons of money, therefore, you don’t have to wait till you have a lot of before considering being financially literate. You can be financially literate in whatever phase you are in. Whatever stage you are in, budget and structure your expenses in a way that is accommodated by your current level of income to avoid personal debts (Very important, avoid/minimize going into debt). With this in place, you’ll realize that you can spare an allocation for investment periodically even at that level of finance. Also, if you are in any kind of debt, don’t ignore it, rather, set aside an allocation periodically, no matter how little, for repayment. Before you realize it, you are done paying it. Start early so that you don’t get to the stage where the repayment of the debt is choking the life out of you. Lastly, with your current state of finances, do that which you desire, with the proportion your wealth can afford. It will help you curb frustration. Learn to live within your means before you try to increase it; gain control of your spending habits.
- The Place of Discipline: You need discipline for whatever prevents you from utilizing your means for your needs and setting aside a seed to multiply your wealth with, whether it is justifiable or not. This means that discipline cuts across all you use money for, whether it is for giving or buying that luxurious item your heart desires or even investing. Everything must be balanced. A great tool to set you on the discipline track is budget. Your income should be spent on a budget, advisably by percentages. This helps you put a balance on your spending. There should be a percentage for giving, investment, upkeep, shopping etc. and for miscellaneous (in case of emergencies, so you wouldn’t choke yourself out). With a budget in place, each category is allotted a percentage. Once that allotment is exhausted, that’s all. You don’t keep falling for every opportunity that comes your way. However, when exceptional cases come up and you need to reschedule your allotment, you can use your discretion. Another view of discipline is discipline of emotions. Money affects our emotions which automatically affects our health. Don’t let the presence or absence of wealth take a serious toll on your emotions.
- The Position of Debt: Debts can be very alluring. Something keeps prompting you to spend more even when you don’t have the money at the moment. It gets worse that people even buy things on credit and find it difficult to pay. For others, they go into debts with the hope of getting a steady flow of income, but unfortunately, such flow becomes cut off, for example, the person loses his/her job or a business doesn’t do well. One thing I want to establish today is that you can do without debts, likewise your business. Avoid living your life to impress or going with flow when you can’t afford it. For enormous expenses, start planning for it ahead of time. This helps you pay it off without going into debts. If you’ve are in debts, this approach can be of good help
- Start by restructuring your finances. You’ll realize that, pending the time you’re repaying the debts, you can do without some expenses.
- Set aside a proportion of your income for repayment of your debts, no matter how little the amount is in comparison to the full amount of debt.
- Another additional option is to engage in a business that will enable you get funds faster to pay your debt.
- Don’t become too comfortable in your debts. Likewise, don’t borrow to repay your debts. You keep pushing yourself into massive debts
- The Money-Attracting Personality: Money can be attracted. You can attract money to yourself. There’s a position you can be that will attract money to you. Howbeit, you must consciously put yourself in that position. It doesn’t happen be chance or mere wishing. It requires actions and diligence. To attract money
- Re-position your belief system: The saying “You are the products of your thoughts” is not just a cliché. Change your thoughts and your entire life will follow suit!
- Reposition your association: It is being said that your network is your net worth. Your association affects your belief system
- Get a plan: When you plan and start taking actions, things begin to work in your favour. I’m a witness.
- The Stream of Income in Purpose: Your purpose is your calling. It’s what you are created to do. It is what makes you successful. While fulfilling purpose gives life a meaning, fulfilling purpose and generating income are also not mutually exclusive. There is an earning potential in purpose. For you to maximise your earning potentials and thereby enhances your ability to generate other, you should choose a mechanism that you are passionate about, derive fulfilment and find long-lasting inspiration. That’s financial literacy!
- Multiply your wealth: It is very easy for people to save. In fact, for many, savings is their final stopping place, giving themselves that pat on the back as they see how much they could store up over time. As much as it is financially wise to store up money in very liquid funds for emergencies and the likes, it is as much financially wise that a proportion of your income goes into investments. We can’t multiply our finances by saving, we do that by INVESTING. Investments are assets or items acquired with the goal of generating income or appreciation. Investments can be stocks, bonds, mutual funds and, derivatives, real estate, jewellery; anything an investor believes will produce income. Here are a few tips to note when investing
- Start early;
- An allotment of your income, deducted first, should go into investment;
- Your investment should be goal-based;
- You should be well-knowledgeable about what you’re investing in;
- An investment club can help be of help. It helps you pool funds with friends to invest;
- Think long term.
These seven modules form the basics of financial literacy. Start with these and you are on your way to financial literacy
We believe in you!
To your financial indepenence and freedom
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