The Sunday Mail
Dollars & Sense
Kudzai Mubaiwa
The basics of how money works will never change – no matter where in the world you are and your level of income.
There will always be earning, budgeting, saving, spending, investing, debt management and financial planning. While it is good that most Zimbabweans (more than 90 percent) are literate, that is, they can read and write; it is equally important to aim for financial literacy – being aware of how to make and manage money.
Recent reports indicate that only 42 percent of our people are financially literate. Everyone, at every level of income must appreciate the importance of financial wellness in addition to other life wellness aspects.
Personal finance is a personal responsibility; you must actively take charge of your money issues.
The first element to consider in this journey is the overriding theme that managing money more important than making it.
Most of us have encountered people who make quite huge amounts of money, but never seem to be doing well.
Equally, many of us will have met people who have modest earnings but are doing relatively well in life.
The difference between the two is the ability to use money well. That is an important life skill, as the majority of people will never reach a point where they have more money than they can spend.
If anything, much of life will be spent trying to attain a balance between what one has in the pocket, purse or wallet and what one wants and needs! It can be done, and this column will share insights and practical pointers on the how over the coming weeks.
Act your wage and live the life you can afford!
The second element to consider is that in spite of the state of the economy in this or any other nation, you owe it to yourself to ensure you cover the four important money bases.
These are lifestyle, emergencies, retirement and legacy. You will do well to choose a lifestyle you can afford as the first, most important action in the financial wellness journey. As the young people say in street lingo “zvigadzirire size” – simply meaning live according to your means.
Many financial struggles are solved by accepting what your present income is and then ensuring that guides where you stay, what you wear, eat, drive and where you send your children to school. This is not to dissuade you from wanting nice things, but to appreciate that we progress from one glory to another, in stages.
Most of us will be able to solve our issues if we make the necessary adjustments to our living standards and match it with present income. Very few are sophisticated enough to start by choosing a lifestyle then making the appropriate income. Stabilise yourself by revisiting your monthly payments, and check what you can afford.
It may be necessary to revise some things and completely remove others. Thankfully, there are products and services for every level of income in Zimbabwe. Act your wage and live the life you can afford!
Make use of insurance as much as is possible
After mastering the lifestyle, take note that you must also make arrangements for emergencies.
The most disciplined among us can easily be thrown off balance when unforeseen circumstances occur – death, illness, accidents, natural disasters, fire, theft – all of which have some financial implication. Many of these can be covered by using insurance products that offer some relief in the day of trouble.
It is worth making use of insurance as much as is possible, some cover is better than no cover. Being responsible this way will help you avoid unnecessary debt. For the long run, retirement planning also matters.
Anyone who is aged 25 and above must start planning for the day when they can no longer actively generate income, and the sooner you start, the better – because many of the options are a function of time.
Legacy also matters, it is wise to make provisions for your loved ones and secure their future by investing while there is time.
Indeed, there still remain some opportunities in Zimbabwe for building a portfolio of modest investments that can speak to this narrative, beat inflation, preserve value and bring one security and peace of mind.
Never too late to save!
The third, and final element is to appreciate that it is never, ever, too late to do the right thing.
No matter how bad things seem, stay optimistic that they will get better money-wise.
It helps to occasionally look back and consider that you have been through worse circumstances but are in a better place now.
Similarly, you may have been in a better place in past times and that is testimony of the abilities you had and likely still have.
Better days can and will come, as long as you appreciate that no-one is coming to rescue you. What is important is to begin to act in the direction of your dreams.
Take time to reflect and assess yourself this holiday on your present situation. Are your financially well? Are you financially free? (Une kuzvitonga kuzere here pamari?) Also look ahead to your preferred situation.
What are your aspirations? By when would you want to attain them? Then note the actions you must take to move from where you are to where you want to be.
Simple steps matter and will bring the desired end. Financial wellness and building wealth is feasible, even in this Zimbabwe.
Kudzai M Mubaiwa is a financial wellness trainer and author of the personal finance book “Take Charge of Your Personal Finance”. Contact her on [email protected] or twitter @kedukudzi.
