Yes, this is an article about money planning, how to spend it or save it, to be specific. Considering how many of us are educated and get paid, it’s amazing how many people I meet that still get the basics of money-handling wrong. And most of the time it’s not usually that we don’t know what steps to take. From my experience, it’s just that we are too lazy to do it, even me, sometimes.

This leisurely approach to our personal finances obviously has consequences, and not just to ourselves but to those around us as well. Because when you get to the point where you cannot pay your bills, then your nearest and dearest have to pick up the tab. That’s why the what’s-app group contributions are not going away anytime soon.

Granted, as Africans, the communal vibe of coming together when one of our own is down, has always been our forte. And even those in our social groups, who are not materially well-off, get a chance to offer in kind what they cannot offer in finances. Even so, being the one who is there for any other reason, minus the finance, however magnanimous it sounds, is internally agonizing. You may not admit it out loud, but let’s face the facts, you don’t really want that to be you.

The thing is, all this needless distress is avoidable with very simple steps. Just plan your finances, period. Imagine people organizing a funeral for your loved one, and not having to contribute a single cent. Not because they can’t, but simply because, financially, you got it all covered. It’s easier said than done, I know. As a side note, I think it is important to acknowledge that contributions to whatever social function/cause in our communities are not primarily because it is a necessity to the recipient. At times it is simply a token of appreciation or goodwill. So if you can contribute, contribute.

For most of us, we can see that day when we are going to have to pay a 10 million or 5 million bill is coming, but still we ignore it.

Ever heard of someone in a privileged position but in financial distress and you looked at the bill and thought to yourself ‘Really? They cannot settle that?’. Because when you do the mental math in your head, based on the position they have held and your estimate of what they have earned you can roughly estimate that they should be able to cover this.

Let me balance this out by acknowledging that life is not necessarily an equal opportunity troublemaker. It usually seems to dish it out more to some than to the rest. This could possibly lead to people falling at different places in the financial stability curve, regardless of how much they earn. That being said, it is our own reactions to whatever lemons life gives us that carry the bigger impact to where we end up falling in the curve.

Taking responsibility at the individual level is paramount. Before you blame circumstances, blame your steps. What have you really done with what you earn? One of the things you can do (and this gets me to the core of this article) which is talking to someone about your finances. A financial advisor.

The Financial Advisor

But who is a Financial Advisor anyway? Simply put, a financial advisor gives you guidance on what you should do with your money. They are like a doctor for your finances. An advisor will perform a diagnosis of your current financial standing and if anything comes up, give you the prognosis (of where you are most likely headed), that is unless you change your ways.

A financial advisor helps people manage their money through giving them ideas on investing, helping them plan for retirement, determining whether or not they need insurance, what kind of insurance they might need, purchasing real estate, and more depending on the advisor’s credentials, knowledge, and designations.

Let’s talk Finance

Finance is a loaded term with a lot of big words. In its broadest sense finance covers everything from debt, credit, rates of return, yields, capital markets, money markets, and investments. Finance signifies money management and the ways of obtaining it. Finance also includes the oversight, creation, and study of money, banking, savings, credit, investments, Insurance, assets, and liabilities that make up financial systems.

Financial literacy is the bedrock of a personal relationship with money, and it is a life-long journey of learning. You cannot really handle money well unless you have an appreciation of how money works. Not being able to handle money well essentially means you can kiss goodbye whatever financial freedoms you aspire to achieve. So whether you are trying to reduce your borrowing, or planning for a comfortable retirement or just simply trying to get a handle on your finances, having the ability to understand and effectively use various financial skills is a necessity. The earlier you start, the better off you will be, because information is key when it comes to money matters.

Starting with the basics, personal financial planning essentially means going over your finances (where your money comes from and where it goes to) with a fine-tooth comb, with the goal being to come up with a way to cover where your money needs to go, without overstretching where it is coming from. Because our spending habits differ greatly from one person to the next, based on our own personal preferences and what we deem important, therefore, our financial plans too will have to differ.  A financial plan has to be custom for whom the plan is created, i.e. is precise to an individual’s situation and activity.

I must save for my retirement, for example, which requires saving or investing enough money during my working life to fund my long-term plans. This type of financial management decision falls under personal finance.

Personal financial plans could possibly include the purchasing of financial products such as credit cards, insurance, properties, mortgages, and various types of investments. Banking is also considered an aspect of personal finance because people use checking and savings accounts as well as online or mobile payment services.

The Circle of Life

In the Financial rat race scenario, have you ever wondered if the whole world is broke or have you been chosen as an example? This can be a very saddening moment of thought. To avoid such moments, I am compelled to plan well for my finances, personally. I have to allocate my budget component in order. I must decide on what goes where accordingly in terms of my daily spending.

To sum it all up, the main takeaway from this would be “Start where you are, use what you have, do what you can”. You can reach out for further guidance on how you can put your best note forward.

…Let me help you plan your finances early…