The past year has added stress and pressure on families in many ways: the increase in value-added tax, sugar tax, fuel prices, inflation, and so on, the cost of living in Botswana is steadily on the increase. This has become a stress point for many families.
Financial stress affects the whole family. A valuable lesson to be learned from the many uncertainties of 2020 and 2021 is that it’s important to set financial goals for your family. For a healthier, more secure future.
Much like a regular health check, is a financial stress test. The earlier a problem is identified, the earlier it can be remedied. It’s important to do this for self, family and loved ones on a regular basis.
I had a chat with mum, businesswoman and certified financial educator, Cathy Sibanda. About financial goals and planning for uncertainties in Botswana.
Cathy’s passionate about financial literacy and its inclusiveness to all. Her background in Finance led her to start the Financial Literacy Trust to address financial concerns that people from all walks of life face daily. Here are some thoughts she shared about setting financial goals for a healthier future.
What are financial goals?
Financial goals define your financial priorities, directing where your money goes. It’s important to have boundaries around your finances. To determine what you are going to do, or not do with your money.
It’s important to not set goals too high as this may cause you to lose motivation or become frustrated. Rather, build positive habits over time.
The global pandemic reminded us of important lessons on personal and family finance management. Families may find themselves overwhelmed with financial pressure, loss of jobs or loss of some of their household earnings. Some parents may have used the opportunity to venture into new businesses to generate income, and are navigating the tough first months of a business start-up. The scenarios are different, but families may have found themselves in these three situations.
1. Unaware of a need to have financial goals or plan for uncertainties, but are doing okay.
Money management is a necessity in our financial lives. Especially if one desires to have a healthy financial future. Learning how to manage finances is a lifestyle skill for anyone who receives earnings one way or another.
This year, many of us parents found ourselves in fear without warning. Asking ourselves many questions; do I have enough money? Will my family have enough to survive another financial setback? How do I continue taking care of my money during the state of emergency as the Botswana economy recovers? Questions that can keep parents up many nights.
The good news is, if you’re in control of your finances then there is nothing to worry about. I would advise that people adopt minimalist living. Minimalism is all about living with less. This includes less financial burdens such as debt and unnecessary expenses. Even if you’re financially sound, minimalism is the way to go.
2. Unaware of a need for a financial plan and not prepared for such an uncertainty.
This is an opportunity to learn how to manage finances. A good lesson is to track daily expenses and build positive money habits. What one can do to stay above the water is to ensure that they manage what they have effectively.
Unpreparedness has been and will continue to be costly in the long run. The only way to deal with sudden changes to finances, is to prepare in advance and be proactive. Budget for your living expenses, and build an adequate emergency fund.
For example, now may not be a time to buy capital intensive expenses, like house furniture. But rather to cut and reduce all expenses. We don’t know how long the financial uncertainties will last. So in the event that it lasts long you should still be able to survive.
3. Anyone who had adapted a lifestyle of planning their finances. Were prepared for uncertainty and looking to better their future.
To plan for the future or similar financial uncertainties, it’s advisable to keep an emergency fund. An emergency fund is money that’s set aside to use when faced with challenges.
The rule of thumb is that an emergency fund should equal 3 – 6 months of your expenses. Let’s say your monthly expenses are worth P5,000 then your emergency fund should have P15,000 to P30,000.
This is a fund that you build over time. It’s best to keep in an interest bearing account that allows you to withdraw without a waiting period.
Where Do I Start?
Standard Chartered Bank is a trusted bank in Botswana that offers a wide array of options to meet your banking needs and achieve your financial goals. Be it short-term or long-term.
What I love about StanChart is I was able to set up my banking account in the privacy of my own home. The card was delivered to my doorstep with great communication and follow up from the team. In the time promised. After activating my card, I received an email with all the charges I could expect. Which the bank has honoured with no qualms from me ever since.
In some ways, the current global pandemic has brought positive changes in our lives. One of them being the increased awareness in families to save and teach children the importance of savings for a better future. Thank you Cathy for sharing your advice with us. We hope that this article sheds light on positive money management and keeping your financial future safe.
Remember to share and stay tuned for more articles on family finances. And how to develop financial goals for a healthier financial future.
** This article is proudly sponsored by Standard Chartered Bank Botswana**
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