Have there been times where you couldn’t figure out how you used your money? I can relate, you are not alone. There are millions of people out there who cannot put a pen to the sheet to account for what they used their money for. Basically, the cause is the lack of budgeting and complying to the budget. Another cause may be lack of money management skills. I share these because of personal experiences and encounters with my clients. The state of money being ‘misused’ by many has the high tendency of staying with them till retirement if an immediate resolution is not taken. Your money may have use for many important things, but the end of your working life can determine the use of your money. In this article I want to share some solutions that can help you at least make use of about 20% of your income and have more at the end of your working life. I will like to say that these simple ideas are not the only way to make your money useful. This is to give you strategies especially on how to invest your money (that is making use of money). Let’s dive deep!
LEARN ABOUT FINANCE
Do you use money? Does everyone use money? The answer will be a resounding YES on all counts. Some may say I use my card or any form of digital medium of exchange. It is still regarded as money- a medium of exchange. If we use money, then we need to learn about it. A medical doctor learns or studies his course for six year and passes out to be called a doctor. A nurse passes out to be a nurse when he has completed nursing training. The carpenter who uses the hacksaw and the hammer was once an apprentice learning how to use such tools. An investment banker gets employed when he has learned and passed the needed courses. Why can’t we learn about finance and be better? One good way to make use of your money is to learn about money. The more you learn about money, the more you can make money. Get my eBook on HOW TO INVEST 10-20% OF YOUR INCOME (out by middle of November) and read chapter 1 to understand and know how you can learn more about finance.
There can never be a life without obstacles. The best way to escape obstacles is to prepare for them. In life many things happen. We cannot tell the exact time certain crisis may occur to us. Crisis or emergencies can be in different forms. It may be house repairs, car accident, car tyre burst, laptop repairs, phone repairs, illness and the like. All these mentioned crisis can occur amidst your pedigree, social and financial status. What makes the difference here is the ability to prepare for it. That rich guy is rich because he has an emergency shield- emergency fund. If he doesn’t have such a fund his wealth will be depleted. This is one of the reasons why insurance policy is important. You need to save yourself from crisis by having an emergency fund. Your emergency fund can be a savings account, investment account or an insurance policy (depending on the type of emergency). In my ebook HOW TO INVEST 10-20% OF YOUR INCOME, I share concrete steps to create an emergency fund. Get it and extract the juicy ideas in there.
The night comes where no one can work said my Lord Jesus. I can really relate this to a time when you go on retirement and you cannot work again. Everyone has a night coming but how prepared are you for that night. Let me reveal this secret to you; there are a lot of costs when you are on retirement. Some of the cost include reduced income, health, food, real estate, taking care of pension babies (if you have), sorting out relatives, car maintenance, house maintenance and so on. In our part of the world the cost involved in the afore mentioned rather increases at a faster rate than decrease with time. The lack of preparation will cause a woeful retirement event. You need to make use of your money by getting yourself a retirement plan. Take this fact; according to SSNIT Monthly News Sheet, December 2018, to qualify for a SSNIT payment of GHC 739, you would have needed to work for 15 years and earn an average monthly salary of approximately GHC 2000 per month for at least three of those years. At retirement knowing that my income will reduce drastically I better prepare for a better retirement. I don’t know about you. Get a copy of my eBook, HOW TO INVEST 10-20% OF YOUR INCOME and get to know how you can have a retirement cash of over GHC 300,000 or more at retirement.
What is education if we don’t have access to it? The idea of creating an educational fund is to help you invest in yourself and probably your child. Some say the best legacy to leave your children is to educate them. I agree to this assertion to a very large extent even though others will debate to the contrary. Have an educational fund for yourself and kids to avoid ‘necessary’ loans. I say ‘necessary’ because at that moment you may not have any other option than to go in for a loan. Going for such loan will 1. reduce your disposal income and 2. increase your expenses. This kind of educational fund can be set up to help you cater for your short (current and reccurring) and long term (future) educational needs. In doing this you can have money to cater for your ward in the tertiary level or for your higher education with ease. I remember setting up an investment fund to fend for my mother’s master program. What a great feeling it was. You can do it too.
IN CONCLUSION, BE HOPEFUL AND POSITIVE
I cannot underestimate the power of positivity and being hopeful. Every good investment advisor will tell you that there is uncertainty when it comes to the economy and investments. Anything can happen. However, being hopeful and positive helps a lot. I say this because being optimistic helps you to make good decisions in case of unexpected performances on your funds. Try as much as possible to start one of the above; learning finance, creating an emergency fund, retirement fund and educational fund. Do not start all at a time be advised! Take it one at a time. At least it gives you an upper hand and the hope to march on to achieve financial independence as we wish for. You don’t need to earn GHC 10,000 to do these. Do it according to what you earn, and you will make progress gradually. Remember this, “Investment is not about money but about the time you give to your money to grow.”