No Amount Of Salary Would Be Enough.

Our educational system, not just Ghana’s but globally, teaches us where and how to find money. But it fails woefully when it comes to what to do with that money. Majority of us knows how to make money, but terrible on money management skills. We have amassed so much hard and soft skills, but if it comes to financial education, we are absolutely ignorant.

When the money comes, only few of us think of deferring some of it to the future. Many of us wake up every morning, go to work and at the end of month, get paid. But before the month ends, that salary is gone. So we start counting the days to our next pay check, and when it finally comes, we repeat the cycle.

One other thing we have been accustomed to is, if you want more money, ask for a promotion, get a higher paying job or acquire more employable skills. So majority of employees either go for option 1 or 2 above. The mantra is that if we get paid more salaries, we will be able to save for the future. The office assistant earning 1,500 cedis is crying that if she is paid more salary, she would be able to save. The junior staff who earns 2,000 cedis believes if she could be promoted to a senior staff rank, she would be able to save. The senior and management staff are all thinking same. Ironically, when the increased salary comes, the cycle starts all over again. During our mandatory one year national service, many of us lived on that meagre allowance without resorting to our parents for financial assistance. We told ourselves that when we get a job with better salary after service, we would be able to save. Many of us are now earning more than five times the national service allowance, and yet how many of us are saving? We just tell ourselves that when the salary increases, we would save towards the future.

However, it is not how much we earn that would make us financially independent, but how much we are able to save no matter how small it is. Financial independence is not a sprint, but a marathon. It takes patience, long term focus and determination. You start off with baby steps (small amounts) and gradually increase the pace. Before you realise, you are running at a horse pace (accumulated savings and interest).

The higher the salary, the higher the probability of reaching our financial goals. However, my firm believe is that it doesn’t matter how much we set aside for the future, but the consistency is what matters!

My proposal is to have a financial goal to work towards. Because where there are no goals, there is no motivation to work towards anything. Have a long term goal broken down into short term goals. Ten years from today, how much would you want to have accumulated in investments? Do not think ten years is too far away, it is just around the corner. Break down that ten year goal into a five year goal, a year and monthly goals. For instance, planning to have at least 500,000 cedis in investments would ginger you to work towards it. You may or may not be able to achieve that target at the end of the ten year period, but having a plan is better than no plan at all.

Also, have a budget for the month and try as much as possible to stick to it. Spend within your means and my personal favourite: keep track of your expenses. Keeping track of your expenses would give you an idea where most of your salary goes to. I recommend you download an app for expense tracking. There are tons of them on PlayStore or AppStore. Personally, I use Money Lover app and I would totally recommend it. It is free to use but if you want to have the premium package, you need to pay some few coins. When you diligently keep track of your expenses, at the end of the month, you would be amazed where your monies went. Analyse those expenses and see where you can cut without affecting your basic lifestyle. Though we have plans of being financially independent one day, but if we do not know where and how our money goes, we would be running in circles.

The best time to have started financial planning was years ago, the next best time is now!