Friday 29th December 2017 1
SIGNIFICANT OPPORTUNITIES • 2nd largest economy in Africa • Growing economy – agriculture, entertainment, fashion, telecoms, manufacturing, construction, Oil & Gas • An entrepreneurial populace • The Internet / technology – global market place • Huge market for your goods and services if you have a good idea that solves a problem and is delivered with exceptional service • Seize Opportunities 2
Personal finance in your teens School curriculums don’t teach financial awareness or planning. If you want to be money-smart, you have to learn on your own. • How much do you get as allowance? • Do you owe anyone? • Do you save? • You must be actively planning your finances. • Update your plans and budgets regularly. It is important to focus on your education and finish well 3
Personal finance in your 20s Starting out Living at home? Relatively few responsibilities Focus on career growth Choice of spouse – most important decision of all You have the gift of TIME Time to establish a firm foundation for your financial future TIME IS IRREPLACEABLE AND PRECIOUS; Don ’ t waste yours. 4
GOALS Your short-term goals (under five years) might include a wedding, buying a car or taking a vacation. Your medium term goals (five to ten years) may be to get a mortgage. Your long-term goals should include planning for your retirement, even though this seems so far away at this stage.
GRIT: Grit is defined as courage, resolve or strength of character. To have grit is to be relentless in your will to be the best. From the time you get up, to the time you go to sleep this grit in you to be the best is demonstrated in your unwavering fortitude and intention to make sure you are the most prepared you can be for every situation you will face. Grit emanates from a desire so strong that you feel that absolutely nothing will stop you from reaching your dream. You are full of energy and ready to learn all you need to learn .
GRIND: This is the grind in the day in and day out commitment to practice, preparation and the sacrifice that it takes to accomplish the dream. It is the work that separates those that rise to the top from those that don’t . The grind is embraced as a necessary and even exciting part of the journey. Toughness, dedication, and the expression of how bad one wants it, is on display through endless preparation and dedicated commitment to being the best and going through the necessary process to get there.
1. Set SMART Goals 2. Create a Budget 3. Be cautious of credit 4. Start saving now 5. Invest 6. Health is wealth 7. Insurance 8. Whose company do you keep? 9. The Family Finances 10.Philanthropy 8
BUILD A SECURE FOUNDATION This is the time to establish the foundation for your financial future, the time to gain your independence; start to imbibe sound financial habits by preparing a budget, developing a clear but aggressive savings pattern, and setting SMART financial goals. You may not have a lot of money in this stage, but you do have the advantage of time to work towards your goals. Take advantage of being in the right place at the right time.
Live within your means • Don’t ever finish spending ALL your money. • If you can’t afford it now, don’t borrow to buy it • Avoid bad debt
LIVE BELOW YOUR MEANS It is very tempting when you start earning, and particularly where you have few financial responsibilities, for you to overspend on eating out, clothes, accessories, cell phones and entertainment. These can be a serious drain on your finances. CREATE A BUDGET -TRACK YOUR EXPENSES Review your monthly income and expenses. Track your expenses for a month; write everything down; from recharge cards to your BRT bus fare and your lunch. You will find that you can and must cut back; for example by taking a packed lunch to work or car pooling. If you are living rent and utility free, this gives you a fantastic opportunity to set aside money to own your first property.
Budgeting Tips • Tithes and offerings • Pay Yourself FIRST • Track expenses for a month • Watch your expenses – cut costs • Be in control of your debt • Automate savings • Curb impulse spending, shop with a list • Bargain hunting – sales - shop in bulk • Plan ahead for major spending / saving • Save windfall income - gifts, bonuses • Include a few indulgencies – spoil yourself a little
Where does your money go?
BE IN CONTROL OF YOUR DEBT Many young people get caught up in a cycle of debt that becomes a bitter pattern throughout their lives. Borrowing comes with considerable responsibility; do not borrow more than you can comfortably afford to repay. Debt can become a huge burden that affects every aspect of life until it is brought under control. Good Debt versus Bad Debt Its better to borrow for things that have lasting value such as for property or an education rather than for consumables such as gadgets, clothes, entertainment and holidays. Give yourself a deadline to pay off or at least reduce the most expensive or most urgent debt. Pay bills on time so that you can build a solid credit history from now. This will be very important when you need to borrow more significantly in the future. Lending to friends and family – Money can ruin friendship. Either give what you can afford, or put some formal terms in place.
EMERGENCY FUND In your 20s, you should be working to build savings. Set aside enough money to pay for at least 6 months of your expenses in an easy access savings or money market account. In spite of demanding dependents and other obligations, make it a priority to try to save at least 20% of your income towards your goals. Pay yourself first. If you are lucky and live rent and utility bill free, help to contribute to your upkeep and save what you would have had to spend. Whenever there is extra income from a "side hustle," a gift or a bonus, give your fund a boost. Automate your savings to keep you from being tempted to spend all that you earn. Your short-term goals might include saving to buy a car, paying your rent, going back to school, getting married and starting a family, etc. Such goals need a specific plan. With the meagre amount you earn, it might seem impossible to save but you can do it if you set your mind to it; cut back on spending, find new income streams and prioritize. WORK TOWARDS INDEPENDENCE
WHO ARE YOU? What is your purpose? Your reputation? What impression do you leave? CAREER In your twenties, getting established in your career and earning regular income should be one of your priorities. This is the time to invest in yourself, to acquire and develop skills that will enhance your career and boost your earnings. ENTREPRENEURSHIP You might have exciting ideas about becoming an entrepreneur and getting rich, but the discipline of earning regular income in a structured environment and sticking with it for a time, can go a long way to prepare you for the future. UNEMPLOYMENT Even if there are no jobs, remember that you have unique gifts, marketable skills or talents. Discover yourself. What are you passionate about? What are you exceptionally good at? It is your responsibility to identify, cultivate and nurture them, invest in them and leverage on them; Tap into the potential for these effortless skills to earn additional income.
IDENTIFY YOUR TALENT Each of us has unique God-given talents, The things you do effortlessly and marketable skills enjoy doing for free. Discover yourself. What are you passionate about? The things you are outstanding at What are you exceptionally good at? doing. What are your hobbies? Tap into the potential for these effortless What everyone compliments you on. skills to earn income. Consider your strengths and It is your responsibility to : weaknesses. • Identify them • Nurture them • Utilize them What’s the one thing you can’t stop • Leverage them talking about?
Talents and Skills: What’s yours? Identify it Nurture it Invest in it Earn from it Don’t let your talent or side business get in the way of your education. Do your best to plan your time. Don ’ t waste time. Your skill can earn you scholarships! Build your profile – you have to do some things for free to build a name. 18
Earning Extra: Pay for performance? • Do you always expect your parents to give you money for doing your chores? • Do you expect cash benefits for passing your exams or being well behaved? • Your parents may give you money or other gifts for some of the things you do – however being helpful is a duty and should not necessarily be paid for.
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