2018 New Year Res­o­lu­tion- Fi­nan­cial Free­dom

Zambian Business Times - - FINANCIAL MARKETS -

Chances are you did take some time to muse about life, re­la­tion­ships, faith, ca­reer and money, as part of the New Year rit­ual to change the way you look at your­self, and an­tic­i­pate a bet­ter you in 2018. If this is your first time hav­ing new year res­o­lu­tions, then I sug­gest you start with over­haul­ing your money or fi­nan­cial life. Ev­ery day, we make money de­ci­sions whether we know it or not. Un­like cars and phones that come with man­ual books, money doesn’t have in­struc­tions on how we should use it. Most of us started us­ing money be­fore we even knew how to spend it or use it wisely. When it comes with money, the re­al­ity is there is no as­pect of life out­side the scope of money. Whether it is pay­ing rent, buy­ing food, pay­ing for col­lege, sav­ing to build a house, or help­ing a fam­ily, know­ing what money can do or not do can help you at­tain fi­nan­cial free­dom re­sult­ing in a life of mean­ing and pur­pose. With­out fi­nan­cial dis­ci­pline, it is pos­si­ble to lose fi­nan­cial free­dom in the golden years of re­tire­ment.

Here are a few steps you might con­sider to help you gain con­trol of your fi­nances:

Start Where You Are

“It is not fit­ting for a fool to live in lux­ury…” Proverbs 19:10. It is not wise to spend money on things you can’t af­ford. The first place to start a con­ver­sa­tion about money is not with how much money you have or don’t have, but with ques­tions to help you re­mem­ber your ear­li­est child­hood mem­o­ries about money. Ques­tions like what did your par­ents teach you or didn’t teach you about money could help you to con­nect the dots re­gard­ing your spend­ing ap­petites or your sav­ings habits. I per­son­ally re­mem­ber both my par­ents as savers; my mother had a sav­ings ac­count (I do have her book as a sou­venir) with then Zam­bia Na­tional Build­ing So­ci­ety ( ZNBS) and fa­ther used to bank with Bar­clays bank. By the time I was in grade 7, I opened my first sav­ings ac­count with the Post Of­fice. If any­one gives me the money, I will first put it in the bank be­fore I can spend it. Al­though it seems rather ob­vi­ous, I still think that bru­tal self-ex­am­i­na­tions is the be­gin­ning of change or as Socrates put it-an un­ex­am­ined life is not worth liv­ing. So many peo­ple have at­tained fi­nan­cial free­dom with­out much money to start with and or fi­nance ad­di­tional in­vest­ments.

Now it is your turn to look at your past and cur­rent money ex­pe­ri­ence.

Open Sav­ing Ac­counts

If you haven't done so al­ready, it is ad­vis­able to have two sav­ings ac­counts; one for emer­gency and the other for re­tire­ment. You need one ac­count you can eas­ily ac­cess money in times of emer­gency, and you need a sav­ings ac­count with with­drawal op­tions rang­ing from 9 months to 5 years. Both of these sav­ing ac­counts of­fer sav­ings ad­van­tages that can add up to a sig­nif­i­cant amount money over a pe­riod of time. The idea is that there is a fi­nan­cial in­vest­ment op­por­tu­nity for ev­ery­one, from ca­sual first-time savers to more ex­pe­ri­enced savers. Once you un­der­stand the va­ri­ety of sav­ing ac­counts avail­able, you can find the ones that can help you reach your fi­nan­cial goals.

Get in the Habit of check­ing your Bank State­ment

Not to sound cliché, but fi­nan­cial knowl­edge is power. There are so many ways to find op­por­tu­ni­ties that will help you at­tain fi­nan­cial suc­cess. It is im­por­tant get in the habit of check­ing the bank state­ment ev­ery month. This hap­pen and it is pos­si­ble to have in­ac­cu­rate trans­ac­tions posted to the ac­count. The sooner you iden­tify er­ro­neous trans­ac­tions on the bank state­ment the eas­ier it is to cor­rect them. Re­view progress on your sav­ings to iden­tify op­por­tu­ni­ties for switch­ing to high-yield sav­ings ac­count to earn more in­ter­est, and save on un­nec­es­sary bank fees. There is no quick fix to at­tain fi­nan­cial free­dom. The im­por­tant thing is to con­stantly and per­sis­tently find ways to stay mo­ti­vated to be suc­cess­ful fi­nan­cially. Subscribe in print and on­line: Tel: +260 977 754 890 / 0967799089 | www.zam­bi­abusi­nesstimes.com

Start liv­ing on a Bud­get

Start Cre­at­ing Your Fi­nan­cial Wealth To­day

Here is how your wealth will look like by age:

If your fi­nan­cial res­o­lu­tion was to save more money, then com­ing up with a bud­get will force you to you to fol­low through with stick­ing to a sav­ing-spend­ing plan. The good news is that a bud­get doesn’t have to be com­pli­cated. You can use a note book for easy track­ing of ex­penses or la­bel a bunch of en­velopes and fill them with the ap­pro­pri­ate amount of cash for each ex­pense or use ex­cel bud­get tem­plates if you al­ready have Mi­crosoft Ex­cel on your com­puter or other avail­able on­line bud­get tools (PearBud­get, Level Money and GnuCash).

In my fam­ily my mother and my elder sis­ter (she was good with num­bers) were re­spon­si­ble for mak­ing a bud­get and it was a trans­par­ent process with in­put from who­ever was avail­able. Look­ing back at the bud­get process mak­ing in my fam­ily, by mak­ing the bud­get as a fam­ily af­fair, my par­ents wanted to be trans­par­ent with us re­gard­ing how much in­come the fam­ily needed to live a mod­est liv­ing in the mines. Ad­di­tion­ally, my par­ents wanted us to have the first­hand ex­pe­ri­ence un­der­stand­ing the fam­ily’s fi­nan­cial strug­gles. I am of the be­lief that our child­hood mem­o­ries of fi­nances, whether we ad­mit them or not still in­flu­ences us how we re­late to money, even to­day. Al­low­ing kids to be part of the fam­ily bud­get mak­ing is a sure way to men­tor them to pre­pare them­selves for what­ever fi­nan­cial sit­u­a­tions life will throw at them.

When it comes to money, it is never too late to start cre­at­ing wealth. You may not have come from a fam­ily like mine with the lux­ury to learn­ing about fi­nances. The good news is that you can get se­ri­ous to­day and take the above right fi­nan­cial steps to con­trol your spend­ing ap­petite, con­trol your bud­get and thus take con­trol of your life, live a happy life there­after. Al­bert Einstein once was said, “Com­pound in­ter­est is the eighth won­der of the world. He who un­der­stands it, earns it ... he who doesn't ... pays it.” Whether or not he said, the uni­verse truth about com­pound­ing in­ter­est has be­come the bedrock of fi­nance and bank­ing. Start small and keep it sim­ple. For ex­am­ple, by just sav­ing K50 ev­ery week from Jan­uary 1, 2018 to De­cem­ber 31, 2018, you will have K2,600 in your sav­ings ac­count as item­ized be­low:

By just in­cor­po­rat­ing these steps as part of your 2018 new year res­o­lu­tions, you will be join­ing ranks with mil­lions of peo­ple across the globe and prob­a­bly you will be the first one in your fam­ily to have made this im­por­tant de­ci­sion on to in­crease your fi­nan­cial worth, to give you the peace of mind you need in your golden re­tire­ment years. Un­like other new year res­o­lu­tions peo­ple make, get­ting con­trol over your spend­ing habits and by just in­creas­ing your sav­ings has im­me­di­ate vis­i­ble re­sults. When­ever you (and you will) feel dis­cour­aged with at­tain­ing fi­nan­cial goals re­mem­ber, the words of my hero Ben­jamin Franklin, the man on the $100 bill, “be al­ways at war with your vices (wast­ing money), at peace with your neigh­bors, and let each New Year find you a bet­ter man.”

Mr. Ce­cil Nsam­bila Mbolela, is a Zam­bian-Amer­i­can a na­tive of Mu­fulira now based in Chicago with the Fed­eral Re­serve Bank of Chicago.

For com­ments or feed­back can be reached at Ce­cil_22_cm@ya­hoo.com

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