Below are some of the money mistakes we usually undergo as humans and I talk from an experience point of view of which am yet to perfect, it should serve as a work in progress. The times before us as a country are tough. It is therefore prudent to save every extra coin for the dark days.
- Never spend money you haven’t received. Don’t even promise someone money based on a promise you have from someone else. What if they don’t honor this promise, the result is you will be left in debt.
- Never borrow money that accrues interest to start a business. That is to say, never borrow money to start a business expecting that the business will generate income to pay back the borrowed money plus the interest.
If you want to save, whenever you receive money, don’t start spending hoping that you’ll save what remains. When money to spend is not available, we naturally find a way of doing without it. That’s why I’ve learnt to save with a Savings account, Sacco, Chamma, Insurance policies etc. Once I send money there I assume I no longer have it. Before you spend any money, put your savings aside then spend what is left after saving.
- When you get an opportunity to meet a very wealthy person, never ask for money. Ask for ideas on how to make money. They may even choose to give you money on their own after seeing that your ideas are great.
- Keeping your seed instead of planting it. Many people stop at saving. It’s very, very difficult to save and have all you need to maintain your lifestyle especially after retirement. When you save, your savings are seed; plant it. When you just keep the seed (saving money) some seeds begin to die (eaten by inflation and the like). That’s why I recommend that you read about the different types of investment vehicles you can use to grow your savings. I am not necessarily talking about putting the money in a business, because you can easily lose money in business. I am talking about putting it in an investment.
- Never lend someone money you are not willing to lose. By the time you lend someone money, be contented in your heart that should the person fail to pay, you will not die (chuckles). You should not even lose that person’s friendship if they fail to repay the money you lent them. If you feel the person might fail to pay you and this will not affect your relationship with them, then lend them money. If their failure to pay would make you hate this person’s entire clan, please advise the person to go to the bank.
- Never append your signature to guarantee someone on a financial matter if you are not willing or able to pay the money on their behalf. Do I have to explain that one? No, it’s self-explanatory.
- Avoid keeping money you don’t intend to use in the short-term within easy reach. For instance, don’t walk with 100Usd in your pocket when all you plan to do in a day costs 20Usd. There are always expenses available to gobble any money that is within reach, so if you don’t want to lose it, put it away in a safe place.
- Avoid keeping money in inappropriate places e.g. in socks, under the pillow, in a pit, in the sitting room, in the bra, in a travel bag that you will place somewhere in a bus … impulse buying is a devil that will keep you busy!
- Spending money on an item that you can do without (at least for the time being). These days when I pick money from my pocket or wallet, before paying for something I ask myself: What would happen if I didn’t buy this? If I find I can live with the consequences of not having that thing, I smile and walk away.