Securing Your Financial Well – Being

“Credit buying is much like getting drunk, the buzz happens immediately and gives you a lift. The hangover comes the day after.”

Dr. Joyce Brothers, 1927

I remember back in primary school our teacher asking how many of us wanted to be rich and everyone would lift their hands. You can already guess this was an incentive to be attentive to the teacher just as I hope you will pay attention to this article till the end.

Financial wellbeing is an inexhaustible topic; we constantly want to know what more we can do with our existing resources to create more for financial stability. Someone once said financial wellness is like a fitness plan to improve your relationship with money, no matter what your financial situation is. Perhaps, perhaps not. Well, let’s find out!

In my opinion, joining this much publicised meeting was one of the best choices the attendees made this year but I will let you be the judge of that. Through the meeting, various topics were tackled; from debt, budgeting, managing savings, investments and before I spoil all lessons on this paragraph, let me tell you about our guest speaker. Sundeep Raichura is a passionate financial wellness consultant, who doubles up as the group CEO of Zamara Group and a charter member of Rotary Club of Muthaiga.

On Tuesday, the 9^th of March 2021, members and guests converged on Zoom with high expectations of learning more on how to manage finances. Brief introductions and pleasantries were carried out and it was all systems go! Rotarian Sundeep started off by blowing our minds with his definition of wealth; “…Wealth lies on the eyes of the beholder just as beauty is…” Huh! So, what is your definition of wealth? Maybe you can write it down as you continue reading the next few paragraphs.

Let us start by talking about debts,

The majority of us, if not all, have heard of Mobile loan applications like Tala, Branch, Fuliza among many others. And do you remember the last loan you took?  Having debt is basically spending your money before you earn it and at the end, you pay it back with an interest.

Reasons why people take debts vary from;

• Wanting more than they can afford
• Easy access to credit
• Peer pressure. Yes.

Did you know there is good and bad debt?  For example, a home loan is a good debt while taking a loan to buy luxurious clothing which you can’t afford is…. You get the gist now!

My dear reader please read this carefully; Run away from debt if you can. Here are some tips to avoid the debt trap;

• Never borrow to pay off short-term debts.
• Keep away from micro-lenders, they are expensive!
• Beware of credit cards
• Get rid of short-term debt
• Live within your means

Budgeting

Budgeting is one of the key disciplines required when growing your financial well-being, it is the foundation of all good financial decisions.  Imagine buying every nice thing you see along the way, forgetting you have bills to settle and other personal expenses. It’s rather unfortunate that 10 – 15% of our income is mainly spent on little things unaccounted for. We have all fallen short of the budgeting discipline but according to Sundeep, the power of budget is that you need to save before you spend.

Tips on how to go about budgeting include;

• Setting financial goals
• Prioritizing your goals
• Determining necessities and wants
• Evaluating your living standards
• Making use of budgeting apps

Savings

A beautiful definition of savings is “Accumulating money before you spend it” Wow! Perhaps you are wondering why you need to save.  Here are some of the reasons that can influence you to save; creditworthiness, for education, emergencies, to buy a home, retire comfortably, to take your crush on a date (LOL), etc. You can add your reasons as well… It is important to separate your savings into; short-term and long-term. Short-term savings can be for emergencies while long-term savings can cover things like pension.

Saving options are limitless and include; chamas, fixed bank deposits, government bonds, SACCO shares, property/land, unit trusts, real estate investment trusts, offshore options, pensions among many more. But before selecting a savings option; evaluate the risk and reward and get the right financial advice because FINANCIAL MISTAKES ARE PAINFUL!

Insurance

“Is it for the old?” Someone once asked but the answer is a big NO. Insurance is not just for the old or those considered as wealthy but insurance is for everyone; you just need to select an insurance product that is suitable and convenient for you. Insurance basically saves your future, ensures the stability of your tomorrows, and grants peace of mind.

Before purchasing insurance products;

• Do a comparison check among different providers
• Do a background check of the insurance providers

Check if its appropriate for you, do not just buy to close the deal

Most of us are sleepwalking into disaster, you may think you have so little to invest in insurance policies, but a reminder that inflation erodes money, the value keeps on changing, so save it, invest it and enjoy a better future.  Maldives, no?

Some of the Main Questions addressed in the meeting:

1. How to deal with black tax; support given to family members. The simple answer is breaking the cycle, empowering them with tips like budgeting, saving and investing. One can also help them indirectly e.g., saving pension for your parent so that they don’t have financial challenges when they are aged.

2. How safe is my money when I save it for retirement? It’s a system of checks and balances and always regulated but, be sure to check the strength of the organization and what percentage you get before signing up.

3. Is it okay to invest in diversified investment portfolios? YES, provided they earn you the highest plausible return while reducing likely risks.

4. What next after investing in Money Market Funds? Check other options like pension, unit trusts etc.

5. Should I take a mortgage loan when young? Why not? If you can afford it, go ahead and get one.

FEEDBACK FROM THE ATTENDEES:

1. “I’m 26, been intending to be intentional with my pension plan from January 2021 but its March and I have not started. Thank you for this topic of discussion, I’m on it like tomorrow!” Abigail Kabui, Guest, RCNC.

2. The Rotaract Club of Nairobi Central strives to grow its members and guests professionally. We highly commend the job well done by our board for making our meetings worthwhile!

Are you challenged as I am?  What is your next step to ensure financial wellbeing? Remember the notebook we wrote on as we started, get back to it and do a financial plan for today, tomorrow and your future because we have hope to live many more days and years to come. Secure your future by being your own Finance Manager!

Thank you for checking in; see you again on 23^rd March 2021 for another thrilling conversation!

Article by, Perpetual Machua

Guest, the Rotaract Club Of Nairobi Central.

Member, Rotaract Club of Jomo Kenyatta University of Agriculture and Technology (JKUAT)