Navigating Your Way In The ‘New Normal’ On A Solid Financial Ground
We trust that you and your wonderful family are keeping well as we continue to fight the Covid – 19 pandemic and get accustomed to the ‘ new normal.’ In today’s story, we build upon sharing tips on how you can be ‘ new normal’ ready by taking advantage of opportunities that arise during this time as a business and at an individual level. It clearly can’t be business as usual during such a time. We have observed tremendous changes in the way businesses are responding to the pandemic. For most organisations, risk assessment is on a high, and it should be. We are living in uncertain times because of the ‘uncertain’ pandemic. This calls for all of us to be more open to change than we have ever been before; this is not an option in the ‘ New Normal’; it is a ‘ must do’. The dynamics of conducting business and the way we live are changing every day, and this, in some cases, is leading to tough decisions being made, such as reducing the workforce. Life sometimes throws the unexpected at us. Therefore, it is expected of us to develop the stamina to face and withstand such eventualities, especially that we do not have control over determining when misfortune should strike.
Self Risk Assessment As
organisations enhance the risk assessment during this uncertain time, it only makes sense that you do the same in an individual life. Today’s story reminds you to reflect on this in terms of your preparedness should the ugly happen. How will you survive? What measures have you put in place to ‘secure’ your life and that of your loved ones? How long will you be able to ‘survive’ and sustain the quality of life you have defined for yourself and your family as you try to reorganise yourself? This is the time to tighten that spending; manage your finances jealousy and Save for a rainy day as much as you can.
‘Wise Spending’ – Your New Mantra
The two magical words’ Wise Spending’ should be your new mantra in the ‘New Normal’. When heeded, this can be lifechanging not only during this period but beyond. Simply put, spending money wisely means developing a behaviour pattern that enables you to derive more value from your money. For instance, K100.00 can satisfy one of your needs or ten of them. It all depends on the choice that you make and how you spend the K100.00. Having said this, we must look at money in its entirety. Before we labour on the aspect of saving, we need to first get a holistic picture of money.
Earn It, Spend It, Save It, Invest It, And Give It
In
essence, there are only five things that you can do with money; earn, spend, save, invest or give it away.
Earn it Most
people have to earn an income some way or another (salary or from a business). Whichever way you earn your money, a key decision in this area is determining how much money you actually need to survive.
Spending The
first and golden rule of spending is to always spend less than you earn. When you begin to spend more than you are earning, you incur what is called ‘negative margin’ or ‘deficit’. To avoid deficits, please develop the art of smart budgeting beginning with essentials. Remember that a budget only serves its purpose when it is followed. When you, for instance, deplete money for a specific item, leave it until the following month. Do not borrow against your future because the future is always uncertain. Please avoid debt! If you are already in it, do not despair, seek help from experts on how you can begin to reduce on the debt. The safest route to take is to make purchases on a cash-only basis. This may take you a little time to buy what you want, but it is always worth the wait in the long run.
Saving The
extra money you have leftover at the end of each month after taking care of your essential needs and meeting your giving budget is called your ‘savings’. These must always be regular and planned. Remember the 50 30 20 rule of managing money! (50 for managing essentials, 30 for managing ‘wants’ and 20 for saving). Ensure that you save that 20% of your income; aim to reduce on the 30% during this time because you cannot carry out your usual activities during the Covid -19 era due to ‘restrictions’/health guidelines. Grab this opportunity by increasing your 20% and using this time to set up your contingency fund of six months of your income if you have not done so yet. If you temporarily lose your ability to earn income, it will help you and your family as you work at finding a new source of income.
Investing
Investing your money wisely is essential in getting the most return on your time and effort. ‘ Now’ that you have worked hard to earn that money, this is the time it should work for you. To ensure wise investing, always seek professional help to guide you about suitable plans according to your financial goals. Investments can be low, medium or high risk. The last thing you want is to ‘watch’ your hard-earned money drain away because you used a poor investment strategy.
Giving Like
saving, the amount of money you give away to help family, or a charity should always be planned. A clever way to do this is to keep some money aside in a contingency fund for those ‘spur of the moment’ expenditures.
Impact Of Saving On Economic Growth Of
all the five things that we can do with money, the most challenging to execute have been spending and saving. Economies across the globe identified that poor spending and saving habits alongside excessive borrowing played a major role in the 2008 financial crisis. For economies to improve, participants must be educated on the need to manage their money well today for a better tomorrow and learn good spending habits. We have an existing National Strategy on Financial Education (FE) whose objective is to have a financially educated population. Various stakeholders who include banks, have been identified as being key in the execution of the FE strategy. Unfortunately, the saving culture in Zambia is far from satisfactory due to a number of factors such as lack of information about what is involved in ensuring that people save and why it is important.
Transform Your Money Management Story Narrative At IBP
We
have suitable savings accounts such as the EazeSave to help you achieve your set financial goals. We also have a very convenient, Chip & Pin, VISA card called the InvestGo Prepaid card. With this card, you only spend what you plan and budget for. It is a very convenient and useful budget tool that manages essential items on your budget, such as bills and school fees. All you need to get this card is to visit any of our branches nearest to you. Remember that you need not be our customer to own this important money management tool! Being on your way to becoming Money Smart couldn’t be easier. You can preload upto K50,000.00 on the card. So manage your spending with the InvestGo card today and going forward! We trust that you enjoyed the read and that you have picked valuable lessons from this story that will help you change the narrative of your own money management and saving story today and going forward. At Investrust Bank Plc ( IBP), we truly believe that one of the real joys of life is to have a free mind void of worries especially those to do with money. You deserve this and much more! You can count on us to be your trusted partner in your Financial Freedom Journey. So how much should you be spending? Spend way less than you earn and only money that you budgeted to spend, you need not be a rocket scientist to figure this out, it is this simple! The power to achieve this is with and within you.
Until next time, stay blessed and be a blessing to others. Remember to keep safe and follow the health guidelines at all times as we continue to fight Covid – 19.