FOUR HABITS THAT WILL IMPROVE YOUR CHANCES OF FINANCIAL SUCCESS IN 2022

Financial success is an important goal to many people and rarely misses in New Year resolutions. Most of us focus on the most logical option to achieve our financial goals – increasing our income. While making more money is critical to financial growth, it is not the only factor that contributes to financial success. In the long-term, our habits matter more than our income in our journey to financial success. Below are some powerful habits you can start putting into action  in 2022 to increase your chances of financial success.

Use digital solutions for payments and money transfers

While some people still use cash in Kenya today, mobile money appears to be the preferred option for many. Let’s face it, paying for goods and services, paying your bills, or sending and receiving money via your phone, whether M-Pesa, Airtel Money, or another service, has become a routine part of everyday Kenyan life.

We all do it, but only a few of us take time to go through our M-Pesa  messages to analyze the fees we pay over a particular time, our spending patterns  and other important financial data. If you used your mobile money app, you would get all this data and more insights, allowing you to make the adjustments you need to meet your financial goals.

Besides giving you access to important data, using a digital solution can also help when sending and receiving money across borders. Over the past few years, international money transfer has mostly gone digital.  This comes as no surprise: digital money transfer services are faster, more secure and more affordable.  Depending on the service you opt for, they can also be significantly more convenient. For example, WorldRemit, which is 100% digital on the send side, allows receivers to get their funds as a bank transfer, in their mobile money wallet, as airtime top up (allowing  transfers as low as  Kshs. 100), or as cash pick up at an agent, usually a bank or a licensed financial institution. WorldRemit supports customers in more than fifty countries to send money to recipients in one hundred and thirty countries, including Kenya, in over seventy currencies.

 It’s never too late to build a savings culture

‘A penny saved is a penny earned.’ ‘Save me today I will save you tomorrow.’ We’ve all at one point heard sayings of this nature highlighting the importance of saving money. But have we put them into practice as often as we should?

 Most people don’t save because of the misconception that they do not have enough money. If this is your mindset, you’ll never have enough money to embark on saving.  The secret is to set a percentage target no matter how little or irregular your income is. For example, target to save ten per cent of your income every month for a start. You will be surprised that in a brief ten months, you’ll have extra money worth approximately your average monthly income during the savings period. What about in v five to ten years?

Cultivating a savings culture has many benefits.  This includes covering emergencies, helping you manage loss of income, preventing unnecessary debts and giving you financial freedom. It also has important psychological benefits, including giving you peace of mind and the discipline to say ‘No’ to yourself, a useful skill in many spheres in life beyond personal finance.

Do not shy away from conversations about insurance

We all know how annoyingly persistent insurance salespeople can be. Sometimes, you are right in turning them away. That, however, does not mean you should not educate yourself about the importance of insurance and the different kinds of insurance products you can go for.

Think of the number of families that have seen their fortunes decimated due to the untimely illness of a loved one. Or about the businesses that have collapsed due to a misfortune like theft. Insurance is not about making you richer but protecting what you’ve worked very hard to build.

Very often, when strategizing we think about offense but forget that you can also win by playing good defence. This is what insurance is about. There are many affordable products out there. You just need to be intentional about your research. It is also important to look at the track record a particular company has of paying claims and familiarize yourself with the ins and outs of the claims process before you start paying your premiums.

 Try your hand in investments

Finally, you must not forget that the income you make from your business or employment to a great extent relies on your time and labour. These will not always be readily available as you imagine. Time could be taken away by family and other social commitments. Your labour could be affected by illness or  a change in the industry you’re in.

You must learn to invest your money, whether in real estate or financial securities like stocks, bonds, and other assets. There is certainly a   risk involved in any kind of investment. Learn about the ins and outs of investing as soon as you can, learn from the best, and put what you learn into practice, taking care not to gamble everything away in one deal, but progressively build a portfolio.