Hallo Entrepreneurs!!!
Welcome to our Financial Literacy training module where we are going to be discussing all things to do with how you manage your finances.
There is a certain myth among us that tells us that the more you earn, the better your financial health will be. This is completely untrue. Have you ever seen some people who earn a lot but struggle all the time? Their pockets are always empty and they are always looking to borrow some money. Then you have those who earn very little but always have surplus at the end of the month.
Financial success is being able to consistently grow your net worth. If you are always borrowing, or never have surplus at the end of every month, then your net worth will always be on a downward trend, and not an upward trend.
What is net worth? Net worth is how much you are valued at when you add up all your assets, and subtract all your liabilities. In other words, it’s what you own, minus what you owe. Many successful looking people have a negative net worth. I have a friend who lives in a lovely flat and drives a very nice car. However, if she were to try to dispose of her car and her flat, she would still owe the bank money. In effect, her net-worth is negative.
It’s great news to know that there is absolutely no connection whatsoever between what you earn, and how well you manage your money. Anyone of any income bracket can manage their money and become financially successful, or find financial freedom. Financial freedom is when you do not have the stresses associated with creditors calling you on a daily basis or knocking at your door, and you not having any money to pay them. Financial freedom is when you can comfortably meet your regular obligations and still set aside some money to grow your wealth. Financial freedom is our goal!
How do you view money? Does the word financial planning or budgeting make you want to run away and hide? Are you comfortable talking about money in your family or is it an adult topic, never to be heard by the children? In our next instalment, we are going to discuss how our different personalities affect the way we view money, and how we can align our personalities to become wealth creators, instead of debt magnets.
These articles are also featured in our Fempreneurs Africa Magazine. To subscribe, add your email to our mailing list or if you prefer whatsapp, wa.me/263719863610