Wondering How to Manage Your Money?

By Kawira Gakuu

“Money, like emotions, is something you must control to keep your life on the right track’’. These words by Natasha Munson show that if you are not able to control money, then you are in trouble. In essence, money management is the ability and skill to know how much money you have, how you are going to save, spend and make more from the same amount.

The youth world over should know how to manage their money otherwise their future will be bleak. Money management goes hand in hand with personal management. If you are given whatever amount of money, would you be in a position to account for it up to the last cent?

First of all you need to know how to make money that you are going to manage. Using the allowances you get from your parents, you can start small time income generating projects. For example, if you live in the rural areas, you may start a rabbit or chicken rearing project which you can sell in future and reinvest in the same project or another one. If you are in town, you can run errands for people and get paid. The point is, if you are keen enough, you will come across an opportunity to invest your money and generate great profits.

More often than not, life’s problems come in when you have made some money. This should not be the case. Some people spend money before they get it, others spend it as soon as they get it, while a small group of people plan meticulously on every penny they have. Knowing how to plan your money in advance is important.  Planning means you will make a budget of what you need and be in a position to prioritize. You should bear in mind that once your basic needs are met, the rest can wait till a time you can afford them.

Another money management skill that every youth should be aware of is saving. There are people who are good in saving money in a bank while others are not. If you find that saving money is a struggle because you withdraw it soon after depositing, there are other ways to save. For example, you can come together with your friends and start a circle or a Chama,  (Kiswahili word for organized group where you can contribute money weekly, fortnightly or monthly), you can  buy shares and stocks or you can purchase property whose value appreciates with time. This is good because as much as the money is yours, you cannot access it as easily as you would if you had deposited it in the bank.

When saving through the bank,  you may want to take a lesson from your parents where they would separate money for different purposes. You can open several accounts and deposit money for different uses in each. You do not want to mix money meant for basic needs with that meant for leisure activities. By doing this you will be in a peaceful place and you can be sure that your money management skills will have improved for a better tomorrow.

Living within your means is very important. This means that you will not spend what you do not have and when you get money, you will leave some amount to save. Some people end up in problems because of buying things they do not need at the moment. The friends you chose will factor in when it comes to how much you spend. Therefore it is very important to choose your friends wisely. People with similar beliefs when it comes to money will be good for you as you will peer manage each other. On the other hand if your friends’ idea of money management is spending every penny they have, you have no business keeping them.

Planning your recreational activities is very important when it comes to money management. By getting involved in sporting activities, you will be busy most of the time meaning that you will not spend your money in unnecessary activities. In fact you will be surprised that this activity could bring you money in future. You could also take hobbies such as coin collection, stamp collection as well as art collection. If you do this, you can rest assured that at a later date, you will get a sizeable amount of money. Make sure that you avoid idleness as much as possible because this is when most youth spend the little money they have in their pockets. Make your leisure activities as inexpensive as possible.

Financial advisors are everywhere and you can benefit greatly from them. This does not mean that you have to part with money for this service. There are people close to us who are brilliant when it comes to money management and these are the kind to approach. “If you want to go somewhere, it is best to find someone who has already been there’’, says Robert Kiyosaki the writer of Rich dad Poor dad books.

Embracing the above lessons on money management skills will place you ahead of your peers and a successful person in whatever field you venture into in the future. Always remember that money is not a means to an end but a tool to help you improve your life and that of others.