There’s a school of thought that mastery is all about doing the most complicated things in a field. Mastery is more a matter of becoming really good at the fundamental principles of a subject and executing those consistently. Personal finance is a lot like that, your ability to use long words pales in comparison to your ability to apply the basic concepts in every situation. Becoming financially literate therefore isn’t as complicated as we think it is. There are just a few things you need to learn.


They say if you fail to plan, you plan to fail. Budgeting gets a bad rap as many people associate it with restrictions on spending. And while sometimes that is what a budget amounts, budgets are just plans. They are plans on how you will direct your money. Getting a budget right is about making sure that money and enough money goes to the essential things. To become financially literate, you will need to understand budgeting; there’s no way around it.


The next thing you really have to get a grasp on to be financially literate is saving. Saving isn’t viewed with glory, but it is one of the most important things you will ever learn to do. Saving has many expressions, but there are two that are important here. First, the act of paying less for things than you otherwise could so, reducing your expenditure. Second, the act of keeping the surplus. Emphasis on keeping it. One of the difficulties with this from a Zimbabwean perspective is that there is a lack of information about savings methods in the country. Our shifting tiles economy and monetary history make this so.


Now for some fun stuff. Investing is a big part of improving your financial fortunes. While investing is often presented with the fantasy of making considerable wins in a short space of time, it doesn’t work like that for most people, especially not in the beginning. Far be it from me to stand between you and the fantasy, but it is highly improbable. Investing is a game of time and discipline. The more time you give yourself in investment, the better the discipline involved in researching investments. There’s nothing easy here, but the work does pay off. Do not feel pressured to become an investment expert in 6 months; it’s a game of time and discipline.


Back to the not-so-glittery stuff, let’s talk about insurance. Insurance is integral to financial literacy, and understanding how it works is essential. See, insurance is viewed as an expense, and until you claim on it, it becomes an asset. We call this a contingent asset. Insurance products are created to guarantee a result in the event that something adverse happens. Knowing that a funeral is fully paid for, medical expenses covered, or a lump sum paid in the event of passing away. Insurance is essential; perhaps paradoxically, the less you have, the more you need personal insurance.


Saving the best for the last education about finances is most important. When (before today, I hope) did you last learn something new about financial management? There’s no wrong answer but some answers are better than others. Here’s the thing; you live daily, so if you’re learning things at a slower pace than daily, there’s a chance you’re not doing the best you could. Consider that we are living in the fastest pace era ever, and in 10 years, a new wave (cryptocurrency) can come up and spread worldwide. Then add that we live in an economy that changes wildly in a short space of time. You need to keep learning and adding new information to what you already know. If you think about it, all the things we have mentioned are education expressed, and that is what financial literacy is financial education.

One final thing, knowing without doing is pointless. If you know everything but do nothing, the result is zero. So go beyond knowing these things; you must apply your knowledge.