If you start consuming enough personal finance material you get the belief that it’s easy. When you start to practice personal finance advice you will start to realise that nothing could be further from the truth. Personal finance can be a complex and nuanced subject with many challenging questions. It is important to ask ourselves these hard questions to help us navigate an even harder terrain.
How did I get where I am
Whether your position is struggling with debt, low income, irresponsible spending or something the first hard question you must ask yourself is how you behaved yourself into the problem. Too often people’s attempts at fixing their finances fail to take off because they do not interrogate the behaviour that landed them where they are. Not all your financial problems are caused by financial behaviours.
When should I start investing
First, we need to understand the reasons for investing. Investing is the act of using your money to create more money for the long term. The answer to this question is difficult for many to accept but you should start investing as soon as you have an income. Investing favours those who stay in the game longer. So you should really start investing as soon as possible. The same answer applies to the question of saving.
Should I pay off my debt or invest
This is a tough question because it depends on several factors, including the type of debt, the interest rate, the potential investment returns and the type of creditor. You can look read this article to understand why these things matter and figure out where you stand. It would be great to do both though is not always possible.
What type of insurance do I need
There are several types of insurance, including health, life, disability, and funeral assurance. Deciding which types of insurance you need can be difficult and depends on factors such as your age, health, and financial situation. There is basic insurance such as funeral assurance which you should honestly look into as soon as you have an income.
How much should I be saving each month
This question can be challenging to answer because it depends on your income, expenses, and financial goals. While there are recommended amounts or percentages you need a savings rate that is consistent with your goals. The best approach is of course a percentage of your income because this scales with you as your income grows.
How can I invest my money safely and effectively
Investing can be a challenging and risky process, and deciding how to invest your money can be difficult without proper knowledge and research. Take time to first educate yourself about investing. Your ability to identify between a legitimate investment and a scam is limited by your financial literacy. Couple this understanding with knowledge about the landscape in your country. Do you know where to verify registered investment providers in Zimbabwe?
How can I budget effectively
Creating and sticking to a budget can be challenging, especially when unexpected expenses arise. The best way to create a budget is to first observe your behaviour. Use an expense tracker app for a month to three months to understand your financial behaviour. From this, you can see what’s important to you in practice. You can start to create a budget that respects what you currently do and your goals. As you interrogate the reasons behind your financial behaviours you can make changes to your budget until matches your long-term goals. Budgeting is a process, not an event.
What should I do if I’m in financial trouble
If you’re facing financial difficulties, it can be challenging to know where to turn or what steps to take. Seeking professional advice and guidance can be essential in these situations. Some problems are so big you need help to get out of them. Professional financial planners, advisors or debt counsellors help to depend on the problem you are dealing with. If your problem is psychological or a result of the experience you may need professional help in that regard too.
As we close Global Money Week 2023 we thought it would be good to focus on the hard part, the questions we must ask ourselves. The theme plan your money, plant your future reminds me of the saying “you don’t know where you’re going if you don’t know where you’re coming from”. We need to ask ourselves some hard questions if we are to make the best of our finances.
