For many people, achieving financial well-being and financial freedom is a lifelong priority but for many people also, what it actually takes to achieve that is often lost on them. In this article, I will present in very simple terms some initiatives to take for a smooth journey to financial wellness.
Financial awareness and wellness is having knowledge about your finances. It is building confidence in knowing how to use your money and making sure that you’re putting some aside for a rainy day.
When you are financially unwell it can even give you headaches as well. You realize that you do not have the ability to make choices. You cannot afford the things you actually want so you have to settle for less. Also, you realize that you are always anxious about money because you probably owe a lot of people or you do not have enough money to afford the things you need.
To have complete financial wellness means you have the ability to make choices, you are living in peace and your future is secure.
The first step in the journey towards achieving financial wellness is starting with a plan. Do not wait to get money before you start planning. Always starts with a plan that is smart, specific, measurable, attainable, realistic and time-bound. There is a quote that says that ‘I want to be rich is not a goal. ‘I want five million in five years’ is a goal. It is important to ensure that your goals are specific and not ambiguous. This way you will be able to put together the necessary measures to achieve it. It does not have to be static so you could always change it when you need to.
Once you have that plan, the next thing you need to do is to look at your current state and ask yourself if you have a budget. A budget is simply telling your money where to go to instead of wondering where it went and giving purpose to every cedi that you earn. So have a purpose for the money that you are earning. A lot of times we say that we don’t have money to save or invest or do anything at all, but it is simply because we don’t have a budget.
The next important thing to do is manage your debt situation. Some of us like to borrow a lot. When we borrow money, we use money we have not earned, to buy things we don’t need, to impress people that we don’t even like. That is how we live. So, every time we are in debt, make sure you manage it immediately so that it does not continue increasing.
Once you have done these things, you will find or create space to start saving towards your future.
So, we are spending way beyond our means. The minute you start putting down your expenditure and writing the things that you spend on, you realize that you are living like a rich man. But you’re actually not that rich. So, you are always spending beyond your means.
It is also very necessary to develop a personal investment portfolio. A personal investment portfolio is a plan that is unique to you, as an individual. One thing we say at Stanbic Investment Management Services (SIMS) is that for each person the solutions are similar, but everyone is different. Everybody’s investment objective is different.
So, when you come in, we try and get an understanding of your current situation and what you want to achieve at the end of the meeting. So, your personnel portfolio, maybe, for a student who just finished school, you have to ask yourself certain questions. What do I do? How much money can I save? This is the amount we can actually put into a Fixed Income Fund, and part of it into a money market to take care of some emergencies. We look at your plan and how much you are earning, and help you work at achieving your goals.
It is very important for one to understand financial well-being. Just like your mental, physical and spiritual well-being, if you do not take care of your financial well-being it can cost you. Young people, especially, must start cultivating the right habits towards financial wellness and awareness so that they can enjoy a stress free financial future. Do not wait until it is too late before you start considering your financial wellness. Start today.
Miriam Maku Amissah is the Head of Sales, Stanbic Investment Management Services (SIMS)