Here’s how to switch up your money management style!

Much of our anxiety stems from the fact that we just don’t know what's going on with our money Click To Tweet

Have you ever interrogated your feelings about money? How would you define your relationship with money management; comfortable, in control, dysfunctional? Even with solid financial advice, some people still feel a level of anxiety around personal financial management.

Sadly the topic of money is still viewed by some as ‘the last taboo’, and as a result, many of the attitudes we have towards it go unexplored. As budding #MotherlandMoguls, building a healthy mindset around money management should be a priority. Here are a few tips to help you to make peace with your bank balance, manage your personal finances and develop a healthy money mindset.

Determine your ‘money personality’

A useful place to start is to try and understand how you instinctively relate to it. Similar to taking a regular personality test, this will help you to understand some of your predispositions toward money management. You can find a whole bunch of free ‘money personality’ tests here.

Keep good records, make good plans

Recognizing your financial patterns and setting financial goals is the key to building a healthy relationship with your money. Much of our anxiety stems from the fact that we truly just don’t know what is going on with our money.

Sound daunting? Don’t worry, we are here to simplify the struggle. Finance guru and friend of SLA Samke Ndlovu Ngwenya put together this worksheet to help you think through your goals, and keep track of your personal financial management.

While you are doing this, take a look back at money management mistakes, or successes you have made and look out for patterns and lessons.

Figure out your conditioning

We all have a certain level of conditioning when it comes to money which has been proven to affect how we relate to it. For example, if you sincerely believe you deserve to make money, and that you are able to do so, this conditioning is considered positive.

It can also be negative and limiting, for example, thinking about money with fear or scarcity. This conditioning is the filter through which you interact with your money.

Money coach Lynette Khalfani-Cox says, “You have to ask: what falsehoods and ideas am I believing that are actually sabotaging my efforts, or keeping me from fulfilling my potential?” Work to change these ideas. You could even try out money affirmations if that’s your thing.

To help you out with all the serious introspection you are about to do, I caught up with two savvy businesswomen. They gave me some insight into how a successful entrepreneur relates to their money.


money management

Money means the ability to uplift - Carol Bouwer Click To Tweet

Carol Bouwer is the Founder and CEO of Carol Bouwer (CB) Productions. This pioneering businesswoman is a committed champion of women. Her company PB Productions is behind The Mbokodo Awards which celebrate the work of South African women, as well as The African Odyssey experience.

What does money mean to you?

For anyone with an entrepreneurial spirit and a desire to be part of shaping our community for the future- money gives you the ability to uplift. Materially and psychologically- money gives you the opportunity to create employment and empower others.

It gives you the ability to inspire others to see what results could be possible if they apply the same level of discipline. Money is not the goal but it helps you achieve the goal.

Is there a specific event/lesson that has shaped how you relate to your money?

Losing it young. Some of the mistakes I made with money management as a youngster have been the greatest gifts in my financial life. The lessons are etched in my mind so they can never be repeated. My big thing with this as in everything in life- don’t lose sleep and lose the lesson- lose the former and gain the latter at all times!

What do you wish you knew about money management when you received your first salary/ paycheque?

Budgeting! I had a whole list of needs and wants but lacked the wisdom to differentiate between the two. To this day I remain grateful for being raised by an “interfering mom”… many of the mistakes I could have made did not happen thanks to her wise interventions.

What habit have you formed, or what trait do you possess, that you believe helps you with your finances?

Sobriety and respect. This applies to finances and many other aspects of life. It is easy to be impulsive but the most important trait one requires is respecting the work that goes into building one’s wealth.

Being mindful of the energy you put into making every cent is what makes you more discerning about the choices you make when parting with it. Mindless spending is sometimes unavoidable in our youth but in this day, if I am not mindful of what I am spending my money on then I don’t deserve a cent of it.

If I'm not mindful of what I'm spending my money on, I don't deserve a cent of it- Carol Bouwer Click To Tweet

Where do you go to get sound financial advice?

I could tell you to get a financial adviser or acquire financial planning services but I am not one to say that. My answer is, go internal. You inherently know what to do. You had the wisdom to acquire it, trust in your wisdom to grow it.

Read and study the markets. Even when you go to your broker, ensure you are not solely an audience but participate. This is even more important for times when there are losses. It allows you to feel you made empowered and informed choices rather than blaming those to whom you hand your money over.


money management

Be honest with yourself and those who need your financial support - Nicolette Mashile Click To Tweet

Nicolette Mashile is a social entrepreneur, property investor and broadcast media personality. She is passionate about people advancement and development. You may recognize her from her popular Financial Literacy Vlog and talks. She is also a communicator by profession.

Is there a specific event/lesson that has shaped how you relate to your money?

Yes. When I was buying my first property, I didn’t know that an Offer To Purchase was legally binding. As a result, I signed for a property well out of my means. I had to fight the bank to retract a home loan of over 30 years which had been approved.

The loan had been generated through a Bond Originator, who misrepresented my expenses and understated them. I ended up paying over thousands in lawyer fees. I eventually settled the issue at the cost of the money I had saved as a deposit. That day I learnt that it is very expensive to be financially illiterate.

What habit have you formed, or what trait do you possess, that you believe helps you with your finances?

Honesty, discipline and I have let go of FOMO. I used to what everything, what to go everywhere because I convinced myself that I could afford it. But I was refusing to be honest with myself whereby finances were concerned.

What is a small action/habit/idea that people can take up, which you believe could totally change our relationship with money?

Paying themselves first. Negotiating their salaries and knowing how much they actually need so that they can save 30% of their salaries. Most people negotiate just a little bit more than what they are currently getting forgetting the value of money changes over each year.

Do you have any advice on how to avoid over-committing yourself financially to family and friends?

Be honest with yourself and those who need your financial support, then budget for them at all times. Stick with what you allocate to them and don’t budge.

Save for emergencies because its Murphy’s law, once you save an amount that is accessible there will always be a situation that rises to the occasion that needs that money

How to monitor a budget to inform business decisions

Budgets play a key role in the day to day decisions, here are 4 scenarios Click To Tweet

The budget is not only important for future decision making but for day to day decisions as well. To be able to use it this way, you must monitor it frequently by comparing your actual income and expenses versus what you had budgeted.

When you notice differences in actual performance compared to your budget that is major, consider what caused the variance and what action you can take if the variance is negative or positive.

To give you a look at how you can go about this process we will take you through four types of variances that can occur in your business and the kind of decisions you can make to remedy.

1. Sales aren’t coming through

Sometimes the projected sales fall short of what was expected due to unforeseen circumstances; maybe a new competition came in or business was just slow. What this means is that you will have a stock in excess of what you had expected.

This needs to be followed up by decisions that will enable your business to perform better; your options may include changing the sales strategy or buying less stock than was budgeted for the next month.

2. An employee disses you

Maybe you had a bit of a tiff with one of your employees and they ended up walking out on your business. What does this mean for your business? Can the work be done without him/her? Can those left do additional hours? Do you need to budget for overtime?

These are all possibilities that can arise based on losing an employee. This will determine whether the positive change in your budget will be a temporary one or a permanent one depending on how it affects the running of your business.

3. Your landlord is acting up…

Unfortunately, this happens quite often than we would like to think about; worse still, you might not even get enough notice to organise yourself if the landlord increases the rent at the last minute. Based on the overall outlook of your budget, you can decide if your business can sustain the costs of an increased rental expense.

The options you might have would be to negotiate the exact amount of increase or when the new rent amount can be effective to give yourself time to plan. You might also opt to look for more affordable space elsewhere, which may lead to double charges in the month of booking and moving.

4. Repair expenses went up

Your loyal van is coughing, your mechanic is charging more for his services based on your desperation. Repairs will be higher than usual. You may not have very many options here except maybe try and find out if the rates are competitive and if it warrants you looking for another mechanic.

If this specific expense is on a continuous rise then you might consider getting another van to reduce the monthly expenses. A new van brings in a whole other dynamic to your budget and your financial accounts.

In addition to giving you a picture of how your business will look in the future, budgets play a key role in the day to day decisions. It is important to constantly monitor the difference between the budgeted expense and the actual expense and make decisions accordingly. Remember that the decisions should be based on the overall outlook of the budget and how one decision will affect another aspect of the budget. Consider the budget holistically and not as standalone budgeting decisions.

The 3 C’s of the budget cycle

Before you create a budget for your business, you need to know what the budget cycle is Click To Tweet

You are probably asking yourself what this thing called the ‘’budget cycle’’ is. You have heard about the budget and how it works but you are less likely to have heard about the budget cycle.

The budget cycle simply refers to the phases or stages that you should go through while working on the budget for your business. Following this step-by-step process will help you make sure that your budget is actually beneficial to you and not just a dreaded process.

1. Coordinate

This is the very first step of the budget process and is highly dependent on what you want to see happen in your business within the period that is relevant to your budget. Three questions you need to ask yourself

  • What do I plan to do and achieve?
  • How much money do I have to spend?
  • What method will I use to budget?

Obviously, you can only budget to spend money that your business already has or is expecting to get. You can project your sales based on past performance and consider that as expected revenue in your budget.

The methods for preparing and presenting business budgets vary and are as many as there are businesses. If you haven’t been budgeting for your business though, this is a simple template that can get you started.

2. Construct

This is where you get your hands dirty and prepare the actual budget. The past performance of your business and what you want to do in the year should drive this stage of the process. Also, consider engaging other pertinent people for your business. For example,  your suppliers’ credit policies will determine how much you intend to pay out to them at what time.

Carry out this process on a monthly basis before coming up with a full year budget. Just as with the financial accounts, have your budget reviewed by external parties and make any necessary changes and then communicate the final budget to all stakeholders.

3. Control

This is also referred to as the monitoring phase. We mentioned earlier that the budget is not meant to be 100% accurate. The monitoring needs to take place at periodic intervals e.g monthly; it involves comparing the budgeted numbers with the actual numbers. This step is important for three reasons:

  • Helps you compare what you estimated with what is actually happening
  • Helps you pinpoint why things are not going according to plan
  • It’s an opportunity to react to the costs and respond to them

In a case where the first two months monitoring process shows that the sales budgeted are less than the actual sales because business was slow, then you can consider whether you need to order as much stock as you had intended to or you could decide at that point to try a new technique to increase the sales.

Similarly, if the rent expenses go up because the landlord increased your rent at the last minute you can adjust the budget accordingly for the subsequent months.

Take charge of your finances with this budget template

Budgeting is not difficult, but sticking to the budget is where discipline comes in Click To Tweet

Most young women in their 20s and early 30s dream about quitting their jobs and starting their dream businesses. But if you ask them how they manage their salary, you will be met with “uuumms” and “eeers”. How will you manage your business income, expenses and plans of you can’t manage your salary?

Welcome to feminancial management! As women, we need to stop being controlled by our finances and take charge of it!

Let’s get started with 5 easy tips to begin taking charge of our money.

1. Budget

How many sisters budget their finances? Let’s talk about Achieng. Achieng is 26 years old. She works in a bank and her career is just starting to take off. Achieng lives from hand to mouth waiting for her paycheck at the end of each month. She spends on hair (with the natural hair trending, products are not cheap hehe!), clothes, social hangouts and such like expenses.

Come one week before pay day, she is already broke, with just enough cash to last her till exactly payday.

Does Achieng budget her salary? No.

Does she track her expenditure? No.

Has she allocated some money for investments or savings? No.

Her reason will be she just earns enough for her upkeep. Once she’s promoted or gets a better paying job, she will start saving. Chances are she will not. Actually, no, she won’t save.

What am I saying here in short?

  1. Budget your income.
  2. Distinguish between your “wants” and “needs”. You want that designer bag, you don’t need it!
  3. Budget “Savings” as your first expense in your budget.

2. Discipline

Once you budget your finances, you need the discipline to stick to the budget.

Meet our other sister, Fatma. Fatma is a 24 year old entrepreneur. She does online jobs and her income is intermittent. Once she gets paid, what does she do? Remember that nice dress she saw in that shop? She buys it and spends and spends and spends till she is broke and waits for the next gig to come along.

The truth is, budgeting is not difficult, but sticking to the budget is where the rubber meets the road. That’s where discipline comes in.

  1. Track and monitor your expenses on a daily or weekly basis to help you stick to the budget.
  2. Separate your finances as per your budget e.g. if it’s bills, pay them immediately your salary comes in, if it’s savings, put up a standing order to a separate Savings account
  3. Remind yourself of the target, create a board even with pictures of your goal to keep you focused.

3. Goals

Have I told you about Maame? Maame is a 30 year old stay-at-home mum. She recently had her second baby and can’t wait to shed the baby weight. What’s her goal? To shed off 20 Kilograms. What is she doing about it? Nothing!

What gyms or exercising videos has she researched on to start her off? None. Doesn’t that look like most of us making New Year resolutions? It’s definitely me. We make plans in our head about our financial goals but we don’t put in the work needed to reach those goals. After a few months, we’ve forgotten all about it or have a myriad of excuses on why we couldn’t attain our goals.

What can we do about that?

  1. Write down your goals.
  2. Break it down into sub-goals with time frames.
  3. Lastly be realistic about your goals otherwise you will get discouraged along the way and quit.
Keeping up with the Kardashians is great but keep up with news and current trends too Click To Tweet

Knowledge

Meet Bola, a 32 year old doctor. She is a high-flying woman with the world at her feet earning a six figure salary and living the life. What investments has she made since she started working 8 years ago? You guessed right! None!

Why? She doesn’t know where to start in investments. Is it real estate or stocks? She has no clue which direction to take. Most young women know a lot about their field in careers but no zilch about investments. But here is a chance to start somewhere

  1. Find a field of investments that interests you, and research on it. Make Google your friend.
  2. Mentors –talk to someone older, not even necessarily in your field who can guide you and perhaps you can learn from their success and failures.
  3. Keep up to date with current trends. Keeping up with the Kardashians is great but keeping up with news and current trends and innovations will help you a huge deal.

Time

Say hello to Esihle. Esihle is a pretty 23 year old in her first job after university. Esihle now has the “financial independence” she has been waiting for and no longer has to ask her parents for money. So where does she spend her free time?

Social media, just stalking her friend’s timelines seeing what they have been up to, posting photos on Instagram with hundreds of filters and catching up with her friends over drinks after a hectic week of work or just catching up with the latest series or movies.

According to research, the average millennial spends 9 hours a day on social platforms. How many years did she spend in the university learning about let’s say Journalism? About four years. How many hours does she spend learning about something financial related? Well, not enough.

If she took four years to study in University and can afford to spend 9 hours on social platforms, how much more informed can she be if she spent one hour learning about investment opportunities like stocks for example each day?

The point is we become empowered when we are more knowledgeable. We become knowledgeable when read and learn. We can only read and learn when we create time to do it! *Drops mic!

What are you waiting for? Get empowered! Start by using this FREE budget template. Take charge and remind your finances that you own them and they don’t own you!

‘Why should start-ups care about the budget?’ – Top 3 budget myths debunked

Time to bust some myths around budgets for business with @StanChart Click To Tweet

Here at SLA, budgeting is not a new concept. I am sure by now we know why we need to set up a personal budget and how to go about it. However, how many of you #MotherlandMoguls spend time budgeting for your businesses? Did you know that there is a difference between the budget and other financial accounts?

During Standard Chartered Bank’s Financial Education workshops we have had small business owners give several ideas about budgeting, most of them are misconceptions that we need to debunk. Have you found yourself making one of these statements about your business budget?

“As long as I have prepared the financial accounts I don’t need a budget.”

“Only big businesses need to do them.”

“They always turn out differently.”

Read through as we debunk each of these common misconceptions

1. “As long as I have prepared the financial accounts I don’t need a budget.”

Here we need to understand that the financial accounts for your business are very different from the budget. Whereas the financial accounts look backward, the budget looks forward. The two do not play the same role for your business.

The budget is a financial plan for the forthcoming period while the accounts are a report for a period that has passed. In our view, the budget is more important as it is a predictor or a guiding light for your business.

2.  “Only big businesses need to do them.”

It might look like only big businesses need to draw up a budget because they handle such huge amounts of money or because they have much more to lose BUT the reason why you need to draw up a personal budget is the same reason why your business needs a budget.

It is actually much more important for a start-up to begin the habit of budgeting so that as the business grows the process becomes easier. Start-ups and small businesses are more likely to go bankrupt in the early years and a budget is one of the important tools that can save your business.

3. “They always turn out differently.”

Surprise! Surprise! Budgeting for your start-up is a tricky business; things do not always turn out the way you write them down. Your sales estimates are not always right; your expenses hit the roof sometimes. We have some good news for you though, this is absolutely normal!

Your business’ budget does not have to be 100% accurate. You should review your budget ever so often to adjust and check on the variances as you get more information. Yes, budgets always turn out differently because they look to the future and we are never 100% sure what will happen in that future; and it acts as a blueprint to ensure your businesses is not groping around in the darkness.

As important as it is,  a budget works hand in hand with the accounts to help you measure the performance of your business, period after period. It is great to have both documents, and if you need the help of an accountant, by all means, go for it.

Budget Like A Pro This Holiday Season

Don’t want to start the New Year with no money?

It is the holiday season and if you’re like us, you’re very excited to buy your friends and loved ones great gifts and go to the best hangouts. And it doesn’t just stop there, you may also be planning a vacation for yourself. You know what this means once January comes around. We know you won’t be excited when you see how your bank accounts look after the season.

To avoid this, you need to master the art of budgeting. Budget like a pro!

Budgeting allows you spend your money wisely and still have some left. There is nothing wrong with going shopping with friends, buying gifts for your loved ones (or even for yourself). However that feeling after spending all that money is terrible.

Topics this guide will cover:

  • How to set financial goals
  • Ways to keep your spending at a minimal rate
  • Ways to save and keep track of your money

We don’t want you looking at your bank account like this in 2017;nicki-minaj-crying-gif

This guide is complete with ideas and ways to budget better, save money and spend smarter!


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Making #MotherlandMoguls money savvy: The big bad B-word of personal finance

shehive lagos she leads africa budgeting
Smart budgeting is how you get rid of the guilty feelings that come from spending Click To Tweet

“Budgeting is fun!”

Said no one ever…oh wait; that’s actually  what renowned Personal Financial Management Guru Bob Lotich says. The first time I read that I laughed myself silly and with good reason. However, the more I read his thoughts the more I understood what he was talking about.

You know that feeling you get when you spend money that you don’t have, to do something that is probably not that important, like buying yourself a new pair of stilettos.

That feeling that lets you know that in a couple of days or weeks you’re going to regret spending your money like that? It will probably come to you when you don’t have cash for fuel a couple of days to payday. Or when you have to borrow money for lunch or fare, or both to take you through the last stretch of the month. That’s when you remember the money you spent on those stilettos and how absolutely unnecessary it was.

Guilt, that’s what that feeling is called and budgeting is how you get rid of that feeling. It’s liberating to know that you are buying a new pair of shoes or a new dress or going out for a drink when you know that you set aside some money specifically for that purpose.

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Either you do, or you don’t

Generally, when it comes to budgeting people fall into three broad categories. You either don’t do it at all and you spend as need or want arises. Or, you budget only for the fixed major expenses like mortgage, rent, school fees etc. Or you’ve got budgeting OCD as far as your money is concerned and you have to know exactly how every shilling you have is going to be spent.

Generally, when it comes to budgeting people fall into three broad categories. Click To Tweet

I fall in the second category as most people, where any other expense that is not considered major falls under the ‘’miscellaneous’’ box. I have come to learn that my miscellaneous box is where my money disappears to. It’s the hole in my pockets so to speak, every small expenditure planned or unplanned falls here.

Most financial management experts will tell you the first rule of budgeting is to know where your money is going. Now, this is a tedious process and can be far from fun. It’s going to need some discipline, but you can do it.

Know where your money is going

If you have never sat down to look at what your spending looks like on paper you will be shocked at what you discover.

Start by using one or two months —possibly even three for good measure, take note of every shilling spent.

The first rule of budgeting is to know where your money is going Click To Tweet

Not only the big stuff but the little stuff as well, every time you buy airtime, every time you buy a bottle of soda for yourself or someone else or any time you have to get something for your children, whether you knew about it in advance or didn’t. This is the cash that slips through the cracks and easily goes without notice.

At weekly intervals sit down to put it all together and see what your spending looks like. This is the first step of budgeting. Once you have this on paper, cluster the expenditure into the major categories: household expenditure, bills, entertainment etc.

This process is important because once you have this picture in your mind,  you will know where you’re overspending or you’re likely to overspend. Then, you’ll start making decisions on what needs to be cut off so that what goes out is equal to or less than what comes in.

Knowing how much you spend on an item on a weekly or monthly basis will also help you know when you can take advantage of some great offers when you shop in bulk. Are you ready to give this a go? Have a look at these exciting downloadable budget spreadsheets to get you started. Thank me later.

The one basic lesson to teach your kids about financial responsibility

shehive accra financial responsiblity she leads africa

Don’t you just wish you had been taught about financial responsibility when you were much younger? In our rapidly changing world, it has never become more imperative to teach our children the need for handling money well.

In fact, it’s such an important skill that it will guide their decisions well into adulthood. If you’re able to do a good job with the lessons now, your children will look back and be grateful to you as a parent. And in getting this done, there’s no better time to start than now —your child is never too young to begin.

It’s important for kids to get savvy about spending wisely, saving and the value of giving to others.

Delayed gratification —an important lesson

When I mention that there’s one basic lesson to teach your kids about financial responsibility, I mean that at the heart of every financial decision you’re getting your child ready to handle in their future is one basic fundamental lesson, which is ‘delayed gratification’.

Delayed gratification is learnt from deciding to do a chore now and watching TV later. It is about eating up two candy bars now or keeping one till tomorrow.

You see, for the most part, the concept of saving money and spending wisely is more about learning to wait for something versus getting it now. Financial discipline is first of all the ability to spend less than you earn (which requires proper budgeting and sticking to it) and secondly, being able to put that excess in the budget away over a period of time (savings).

How do you help your child to be financially disciplined with the concept of delayed gratification?

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Start early

Children form their habits based on what we expose them to. They are influenced by their environment and learn from the things they see on a regular basis. If you let your children understand that it may not always be the best thing to get something now, they grow with that lesson and it becomes easier as time goes on.

For instance, I hear a lot of parents say they don’t like to go to the supermarket with their kids because they are afraid of the demands to buy something that’s not on the budget.

If you train your kids that we do not always get what we want when we want them, they learn to respect those boundaries you’ve put in place.

Teach by example

Children learn by example. They’ll do whatever they see you do. There’s a need to model this concept for the children in everyday living. Use regular situations of life to let your children understand the need to wait for things. They can either decide to get something now or get it later.

Showing them the benefits of waiting can aid them in their decision to wait for something they love. Let them see that waiting is better. The way you conduct yourself on decisions that have to do with spending and savings will impact on your kids.

Don’t shy away from discussing money matters with them.

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Encourage savings

Let your kids learn to save every part of any amount that comes through their hands, no matter how small. Teaching your kids to save is an integral part of helping them to understand the concept of delayed gratification. They can save towards the future or simply towards a desired gift or toy.

Teaching your kids to understand delayed gratification is a gradual process and they will learn as long as you remain consistent in your teaching.

Self-control is a gradual process for your kids and they will get there. Just be firm and compassionate about it. They’ll thank you later.