#03 Accounting

I was speaking to a friend the other day and these were her sentiments on personal accounting or personal finance if you prefer. “Personal finance is not a game of amassing wealth. It’s about balance. Balancing day to day life with the needs of the future. Giving my kids the very best now but also investing in a way that I don’t have to rely on them in future.” She went on to paint a picture about her retirement dreams. To retire early. To retire with energy. To spend more time with her children. To travel with the husband of her youth. To impact society.

In this week’s ‘webisode’, we get to hear more from the anonymous community and how the pandemic has influenced their thinking on money.

It is easy for one to get sick, depressed, or even commit suicide. The times have been dark, but I have decided to let go and let God. I know He will see me through this season. That said, I have upped my game – not that I was managing badly before – I just need to differentiate between what is necessary and what isn’t. _{Musili, 30s, Compliance Expert}

Working from Home has been the biggest gift I have received this season. I have been able to create products that I can sell and attend to virtually and now see possibilities of making more money easily. Previously, all my clients were based in Kenya and meetings had to be in person. I have crossed the borders and now consult within the wider East Africa region. I also have a few assignments in Europe. _{Salama, 40s, SME Practitioner}

I am constantly thinking of saving and investing because anything can happen and life – as we have experienced it – can come to a stand. _{Olamayian, 20s, Legal Intern}

The truth is that I cannot just depend on a single source of income. I need 3 or more avenues of getting cash and I am putting in the work so that my ideas can bear fruit. I need about a million shillings not the 5,000 bob I currently have. Still, I don’t see the lack of cash as a struggle but as an opportunity to think outside the box. I have also found that growing crop is easier and more profitable than raring chicken. Everyone around here is selling chicken! _{Wamaitha, 40s, Farmer}

The lockdowns have been a big eye opener and the lingering question remains to be ‘what would I do if my salary was stopped?’ I am still staying in a rental apartment and living rent free has become one of my priority goals. _{Blessing, 40s, Doctor}

People have lost their jobs, others their businesses, the cost of living has quadrupled, and the economy has taken a downturn. I feel the urgency of getting into investments that can help meet my basic needs of food and shelter and give a decent return as well. Rental income perhaps… I am also thinking of having a shamba nearby that can supplement our nutrition needs. _{Amani, 40s, IT Guru}

A lot of people have asked why they have been working themselves sick. Some have had the rug pulled from under their feet. Societal pressure has led many to depression and others suicide. I think women have more resilience in handling what is thrown their way. I am okay. I have been seeking more avenues to grow my passive income. I am currently in the crypto space and my goal is to understand cryptomining and make the most of the volatility. Yes, there is profit in volatility… _{Joe, 40s, Architect by day, Business Analyst by night}

I generally manage my finances well but I think I have been too optimistic about what the market can offer. The pandemic, however, has changed my perspective on life. I want to live more, go on holiday more, but for now I am happy with being able to cater for my basics. _{Sunday, 40s, Investment Analyst}

I am saving as much as I can. Cutting back on expenses in every way I can. I am no longer borrowing and if I was to borrow, I want to be able to pay it back without feeling the pinch. _{Zaire, 30s, Economist}

Hii COVID imenifanya nifikirie sana juu ya kusave. We’ve survived so far because my mum had set aside some cash for emergencies. I am now thinking of changing my savings percentage from 5% to 15% of all the monies I receive. _{Kevo, 20, Aspiring Mechanical Engineer}

The pandemic did not really change my thinking about money as I already had plans to get into self-employment. What has pushed me is the eagerness to invest more. Generally, when people receive an increase in their salaries, they tend to spend more without thinking about the stability of their income. When crisis hits, they are left at zero. I think it is important to live a moderate life, invest often, and reserve some cash for emergencies. _{Seydou, 30s, Finance Student majoring in Digital IT & Entrepreneurship}

Our expenses shot up as we were expecting our second child and the elder one was due for school. With the arrival of our newborn, we moved into a bigger house which also came with a change in car. All the same, we have continued with our pre-covid investing plans and live with the reality that life can take an abrupt turn. And if it does, we must be ready to quickly adjust. _{Muriithi, 40s, Wealth Advisor}

I have a fairly good grasp of my expenses and do not necessarily budget. I need, though, to make a concerted effort to get into the spreadsheets; perhaps make it a daily or weekly habit. Maybe if I am more intentional, I can make some more savings. What dissuades me, though, is online banking. I find it much easier to analyse transactions to this way. _{Victoria, 40s, Governance Risk & Compliance Specialist}

COVID has driven me to pursue more investments that I have ever done in my life. I am buying and constructing homes. I am actively seeking information on alternative sources of income. I am also looking into ways of lowering my expenses. For instance, I figured that there wouldn’t be much travel during this season and changed my motor insurance cover from the comprehensive package to third party only. That is KES 55,000 to KES 15,000. _{Kigen, 30s, Data Specialist}

I did not panic immediately but the fear eventually came. What exactly would happen in the long run? What if some new disaster occurred? I haven’t made any drastic changes, but I am more conscious about my spending. The big question remains ‘is this purchase necessary?’ _{Sophia, 40s, Due Diligence Analyst}

2020/2021 introduced me to inflation and I wondered why I had never thought of putting my money into good use. All my savings are with the bank, and I am now thinking of moving it to the money markets. It’s about time my money started working for me! _{Jasmine, 30s, Policy & Advocacy Specialist}

Prior to COVID, I had a whole lot of money for entertainment. I have significantly cut back on my expenditure and I am now focusing on building my medical fund. I no longer hang out every weekend and have gone back to taking matatus instead of ubering. Regularly doing my hair and nails is no longer a priority. Thank God that natural hairstyling is acceptable fashion! I am a sweet tooth and continue to make room for small pleasures. _{Regina, 30s, Graphics Designer}

I started buying stocks for my kids and involving them in the process. My son, for example, loves Roblox. Each time he begs for my credit card to buy tokens, I ask him whether he wants to be an owner of the company or just a consumer of its products. “An owner sounds good but I also want to play…” We have agreed to split 50/50 his monthly gaming allowance. One part goes to buying the tokens and the other to acquiring fractional shares in the company. I also help him understand the fundamentals behind investing. Roblox, for instance, has over 600 million players and is bound to be attract larger investors in the near future. It also guarantees good dividends and capital gains. _{Austin, 50 this year, Vice President – Internal Audit}

I have become very sensitive to spending patterns and always ask whether a purchase is required. Not that I am being selfish, I just want to make sure that I am spending money wisely and can save every penny I can. _{Emmanuela, 40s, Development Specialist}

COVID made it urgent for me to reevaluate my liquidity position. I quickly moved from employment and settled into the consulting world. After months of tendering, I managed to secure some lucrative international engagements. I have also renegotiated better mortgage rates for my properties and transferred everything to one bank. It is important that my investments vis-à-vis returns received make financial sense. _{Israel, 50s, Finance & Commercial Executive}

I stopped working before the pandemic. I was not happy with my job and was thinking of a career change. When COVID set in, my desire for financial independence and freedom was amplified 10 times. The interesting thing is that it was as if the rest of the world joined me in my pursuits. Some were still shell shocked, others were trying to adapt to the situation. I was ahead of the curve and ready to kickstart my financial goals. _{Nyamari, 30s, Techpreneur}

The pandemic made me realise that my financial situation can change overnight, that financial stability and subsequently independence is paramount, and that I must live in a way today that will allow me in my tomorrows to still receive a good income without having to show up physically. _{Roxie, 40s, Financial Expert}

Due to COVID, many organisations did not want to get into long term commitments with staff. As such, my practice received so many requests for short term assignments than we have ever had in our 5-year history. It has never been busier and our income levels have grown exponentially. I doubled almost everyone’s salary and to be honest things have been very positive. _{Sankara, 40s, Accountant}

I hope this article has helped demystify the subject of personal finance which is sometimes confused with the pursuit of riches. Not that riches is any way a bad thing. Badness is when you are not able to meet your financial obligations and objectives or fail to reach out for good opportunities. Next week, which is part 2 of this article, I share a somewhat technical article on accounting that I believe will spur more interest in the subject. QUESTION. COMMENT. SUBCRIBE and do have a wonderful weekend 🌻 🌻 🌻