Many Kenyans are currently struggling financially mainly because of their habits and money beliefs they have subscribed to.
Your relationship with money determines whether or not you’ll have some in the account at the end of the day.
Many of us don’t take our personal financial health seriously enough. We often just get by and don’t look to improve our personal money habits and or prioritize our goals.
There are a number of money myths that, if believed, can set us on the wrong path and ultimately cost us money.
You have seen memes and jokes flying around promoting some of these analogies and young people have fallen into believing them.
At Marketcap Trainers, we normally encourage our clients to throw out such beliefs and focus on growing their money because at the end of the day, money might not be as important as oxygen but it comes close.
Below is a list of some of the popular myths pulling Kenyans down financially:
1. If you work hard you will be rewarded financially
You have heard about this more than a million times; hard work pays. Many have been led to believe that the more you work hard the more you will be rewarded financially which is not entirely true. Hard work needs a lot of other factors such as building skills, better money management and reinvestment to double your cash.
2. I don’t have enough money to invest
Setting aside money that will do more than just sit in a bank account earning little to no interest is a fundamental part of creating and growing wealth.
It’s a gross misconception that you need to have a lot of money to make a start. There are several investment options and products that don’t require a substantial principal to get started. Analyze your monthly expenses and spending habits for ways in which you might be bleeding money unnecessarily and set up a monthly savings goal specifically for investing.
3. Don’t bother budgeting for a few shillings( Kula Pesa Yako)
By now you must have seen the joke that goes like any amount that won’t help you at the moment, spend it. Don’t bother saving it.
Controlling your spending habits and understanding that a coin saved is a coin well spent can really improve your financial health. Fix the small leakages because they are sinking your ship and you’ll soon understand why your bank account has always been hovering around zero.
4. What is your attitude to debt?
There are two types of debt: “Good Debt” and “Bad Debt”. Good debt – such as a mortgage or a business expansion loan – should provide a positive return in time. The idea behind good debt is that it will bring future value.
But “bad debt” however — like credit cards that carry high interest rates — can quickly put you in a financial hole.
Debt plays a role in determining your credit score, which lenders use to assess your credit risk and what interest rate you will be charged. The higher the score, the better the terms, which saves you money on interest.
5. Renting is a waste of money
For the longest time, owning a home was considered the hallmark of success and financial independence. That’s not necessarily true. Buying a home comes with a suite of expenses (taxes, maintenance and association fees) and if you don’t make a decent enough down-payment (at least 20%), your finances could take a huge hit from the higher interest rates. If you cannot afford to buy a home, it’s far smarter to rent.
6. Rich people are evil/money is evil
Rich people are not evil as many have been led to believe.
This belief can be part traced to pre-colonial times, where African slave traders sold fellow Africans to Europeans in return for financial payouts, gaining them power, status, admiration and authority from among their fellow African tribesmen.
Therefore whenever someone tries to convince you that you shouldn’t get money because you’ll become evil, just ignore them to save yourself.
7. Money Makes you a target
Some will argue on this but money doesn’t necessarily make you a target for crime.
The problem with some people is that they like to show off.
In the age of social media, this is the new normal. You could learn all you need to know about some people from their social media feeds.
There are many people with money who aren’t famous. Nor show off. And they live amongst us without any qualms.