Money does not stay where it is needed but where it is respected
A survey by McKinsey & Company Financial Services done in April and May 2020 found that household finances across the globe continue to report decreases in income and savings ranging from 30 to 80 percent. This survey among others draws a clear picture for each one of us to ensure we manage every penny wisely in the current times.
On Wednesday, August 19th, 2020, the Strathmore University People and Culture department organized their 16th webinar to discuss “Money Matters: Personal reflection in times of crisis” Engaging the virtual staffers through the topic was Financial Coach, Amos Ngahu, Strathmore Institute of Management and Technology Faculty, Gladys Juma, and the treasurer of MZIMA Sacco, Josphat Manani.
Care for every penny
The pandemic is not going anywhere soon, so we must adapt accordingly and treat our finances well. We need to make money our friend. We need to act now by
- Complying with the government set regulation to avoid being infected by Corona Virus. This will ensure you avoid hefty medical bills or long periods of quarantine.
- Reworking your budget based on your current income. For example, downsize or relocate to a house you can afford.
- Taming your utility bills, mainly electricity and water, as they will significantly increase owing to more time spent at home. Switch off lights and turn off appliances when not in use.
- Finding alternative sources of income. For example, through decluttering your home and selling off items that you no longer need or use. A good example is baby furniture and tricycles that were used by your school-going children.
- Investing. Over and above saving, we need to have other stable sources. For example, treasury bills. These are government loans from the people that help fund projects as they earn you 8- 9 percent interest for a period of 3 months to 1 year.
What does it take to have a sound money management plan?
Financial experts agree that it takes commitment and a solid understanding of your financial situation to be a money master. Effective money management requires you to
- Understand your income and create a budget that works based on your expenses.
- Negotiate or consolidate your debt. Combine several loans into one financial obligation. Talk to your banker and see how they can be of help.
- Create an emergency fund for six to twelve months.
- Save 10 – 15 percent of your income for retirement. The sooner you begin saving the more fulfilling your golden years will be.
Understanding finances is the best investment you can make during this time. Just take your time and effort and get your finances in order. As Dave Ramsey says “We buy things we don’t need with money we don’t have to impress people we don’t like.”
Act your wage!
This article was written by Annete Karanja.
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