Earlier today I was talking with my mother. She was telling me about her friend’s son. let’s call him Paul.
Paul only finished his o level two years ago.
Unfortunately, he could not proceed with further education. Paul was in this case left with no other choice but to find work.
After months of doing odd jobs, he finally landed a permanent job”. Sort to say.
Good for him, you’d think. He finally has a stable job.
However, after a few weeks of waking up early to be at his place of work by eight o’clock Paul quite.
He simply stopped waking up early. His mother could not understand her son’s behavior.
She tried lecturing him, yelled as much as any African mother could. But nothing changed.
Paul refused to go back to work. His answer was simply that he didn’t want to wake up that early.
Devastated Paul’s mother sought help from other mothers.
Flash forward right now Paul is an employer. Though he continues to do odd jobs.
You might be wondering how Paul was able to achieve this. The answer is that Paul unlike many people in the world is a smart worker.
On top of that, though unknowing he is financially literate.
Your question at this point is or should be what is financial literacy.
Financial literacy is a basic understanding of your money. Knowing the value of money and the ability to make smart money choices.
Financial literacy is the ability to deal with issues concerning saving, budgeting, managing debt, investing, and so on.
Paul is the best example in this context because he was able to manage his money and even create employment for another person.
I bet you are wondering which business Paul was able to create employment in despite him being so unqualified. Forgive my tone.
Paul is in the transportation business.
Within a year Paul saved up ksh. 90,000. With this, he bought a motorcycle.
He however did not have the qualifications to drive the bike. He got a distant friend to do business with.
All this was without his mother’s knowledge. She only came to find out six months later after the did have already been done.
Let this however not be said to be the only way we can acquire financial literacy.
Acquiring financial literacy is a journey unique to everyone.
Some have an innate inclination, like our case example Paul.
Who without having much training was able to develop financial discipline. Eventually becoming financially literate.
Others, like myself, have to get training or even teach themselves.
Below are a few ways to get financial literacy and increase your financial IQ.
How to get financial literacy.
Undoubtedly, books are the gateway to a better you.
Knowing the right books is half the battle.
Below are a few of my favorite personal finance books.
In this case, books help us gain financial literacy.
On top of my list is rich dad poor dad by Robert Kiyosaki.
This classic book will not only change your mindset but it will boost your morale to get up and change your current situation.
This book made me want to be financially free so bad that I started a business.
Please do not quote me, by saying that you will have the same experience.
You could have a better experience or no experience at all.
The author describes how his two dads influenced him.
He gained lessons about money from both of his dads.
This book will forever be my all-time personal favorite.
Grab a copy to find out which lessons he gained and why he had two dads.
b) increase your Financial IQ by Robert T. Kiyosaki
you can tell from the title, that this book will increase your financial IQ.
Tacky I know.
However, this book will open your eyes to see where your money drains into.
This book will show you exactly which loopholes ordinary hardworking, honest people lose money.
c) The richest man in Babylon by George Carson.
This book was written in the 1920s.
you might be wondering what such a book could teach you in this modern world.
Its principles are however timeless.
From the modern-day mantra of most if not all financial gurus of PAY YOURSELF FIRST to what you should consider before lending someone money.
This book will have you know how to accumulate and retain money, whether you earn pennies or millions.
These three books have had the most impact on me so far.
I can make an entire article on personal finance books, leave a comment if you’d like me to make one.
2. Take a personal finance course.
If having an instructor will be easier, you could take a money management class.
Let me rephrase that.
Take classes whether or not you are self-training.
Going to the professionals is always a good idea.
Take money management seminars as well while you are at it.
In Kenya finance literacy classes are provided by Centonomy limited.
Whether you are a young adult on campus or you are about to retire.
It is neither too early nor too late to take these classes.
3. Read and analyze magazines about money as well as blogs.
Look at you, you are already halfway to getting financially literate.
Why? You are reading a blog about finance.
Good for you. Good job.
But do not stop there.
Get more resources, read and analyze information that will continue to help you become financially literate.
4.learn and properly use personal finance management tools.
As simple as it sounds, it is crucial to learn about money management tools.
Such tools include budgeting apps and or spreadsheets.
These tools will undoubtedly aid in getting financial discipline.
This discipline will in return be your peddle stool to accomplishing your money goals.
Therefore, learn and properly use personal finance tools.
last but not least, break that consumer mentality and rather cultivate an investor mentality.
What do I mean?
Let me pose a question to you, my dear reader.
What happens whenever you get a substantial sum of money?
Do you think about putting that money aside for a rainy day or do you suddenly get the urge to splurge on new things?
If you are the latter, I am talking to you. Start cultivating an investor mentality.
However, if you put your money aside and multiply it, good for you. Keep up and continue with the investor mentality.
With that said, here are some benefits of becoming financially literate.
1. A financially literate person sets and achieves financial goals.
Whether it is to become financially independent and never having to work another day in your life or simply getting to buy that car and maintaining it.
You can do it if you are financially literate.
Who doesn’t like to have control of their money?
You will stop wondering where your money went and start telling your money where to go.
More to that, a financially literate person is more than capable of eliminating and avoiding bad debt.
This person knows the difference between good debt and bad debt.
Do you know the difference?
4. When you are finally financially literate, you will be in a position to identify fraud (or a SCAM).
I recently read somewhere that when you fall for a SCAM it means that you are
Financial literacy will help us see the red flags in fraudulent money-making schemes.
These were just but a few benefits of being financially literate.
Do they seem worth it to you?
If so, start now, invest in your financial education.
Whether it is by buying books, magazines, paying for money management classes or investing your time reading online articles, and watching youtube videos about financial literacy.
Start today, start now. Invest your time in financial education.
Some people might be wondering how Paul was able to save the amount.
Early last year he joined KYEOP. A Kenyan initiative by the government to teach young people who didn’t get to continue with education past the o level.
Here’s a link to the website
These young people are not only trained in entrepreneurship and other disciplines but are also given a monthly stipend.
After completing his training Paul used the newly acquired skills to earn a living.
Among his ventures includes linking the market women around the home with customers online.
Through this, he not only earns a commission from the commodities but he also charges the market women to have him link them with customers.
No wonder he quit the 8-5 job.
The market women attest to having increased sales like never before.
Therefore, the small fee is worth every coin.
Paul is simply an example of the endless possibilities we have when we are financially literate.
He is not only able to save but he is also in a position to create multiple sources of income.
As I pen off I’d like to state that everyone’s journey is different.
We cannot all be entrepreneurs but we can all become financially literate.
Whether you are in the corporate world or an entrepreneur learn to save, budget, invest, and manage debts.