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Friday letters are usually dedicated to taking questions from our community. Do you have a question for us? Please feel free to
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- simply fill out this form. Don’t worry, your responses are kept anonymous.
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Question
As a student, how do I get better in growing my finances? I started a business some time ago but it hasn’t been moving, and it is really discouraging.
Answer
Starting a business is time-consuming and juggling that with your education and other things that are fighting for your attention is a lot to handle by yourself. There are several ways to improve your finances and make the process of running your business seamless at the same time. You may have known some of them but yet to practice them. Here are some things you can start doing:
- Educate yourself: It is highly recommended that you take advantage of the various resources available online to enhance your knowledge and skills in personal finance and entrepreneurship. Reading books, watching videos, and attending seminars can provide you with valuable insights and practical tips on how to manage your finances and build a successful business. By educating yourself and staying informed, you can make sound financial decisions, minimise risks, and achieve your financial goals.
- Develop a budget: Creating a budget is one of the most effective ways to manage your finances and achieve financial success. A budget allows you to track your income and expenses, ensuring that you are living within your means and not overspending. By using a spreadsheet or a budgeting app, you can easily monitor your cash flow and make necessary adjustments to your spending habits. This way, you can save more money, reduce your debt, and achieve your long-term financial goals.
- Save and invest: Save a portion of your income each month and invest it wisely to achieve your financial goals. One way to do this is by looking for low-risk investments, such as index funds or mutual funds, that can help you grow your money over time. By investing in these types of funds, you can diversify your portfolio and potentially earn higher returns compared to simply keeping your money in a savings account. However, it’s important to note that every investment carries some degree of risk, so, it’s essential to carefully research and assess any investment opportunities before making a decision. You can download the Ladda app to start saving today. It’s available on both iOS and Android!
- Network: This is really important, especially as a business owner. Connecting with other entrepreneurs and business owners in your community is an effective way to expand your network and gain valuable insights. Networking events and online forums provide excellent opportunities to share ideas, learn from others who have been successful in growing their businesses, and potentially even find new clients or partners. By building relationships with other business professionals, you can tap into a wealth of knowledge and resources that can help you achieve your financial goals and grow your business. So, I would strongly encourage you to explore networking opportunities and connect with like-minded individuals in your industry.
I understand that growing a business can be challenging and it can be discouraging when things don’t go as planned. However, it’s important to stay focused on your goals and remember why you started your business in the first place. Don’t be afraid to seek help and advice from others when you need it, whether it’s from a mentor, a business coach, or just a good friend ready to listen and give good advice.
It’s also important to keep in mind that growing a business takes time and effort. It’s not something that happens overnight, and setbacks and failures are a natural part of the process. You need to stay focused on your goals, develop a solid plan, and seek guidance from experienced professionals (you can do this by reading books of successful business moguls, and you don’t have to meet with them physically to get advice from them). By doing so, you can overcome these challenges and build a successful business that will provide financial security and independence for years to come.
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Question
I graduated from university five months ago. I have no source of income yet, as I’m just about to begin my financial journey (get a job). How do I attain a financially independent life from the little salary I might be earning?
Answer
First of all, congratulations on your graduation! It’s such an exciting time in your life, and it’s great to hear that you’re ready to start your financial journey. I know it can be overwhelming at first, but with a little bit of planning and some good habits, you can set yourself up for a successful financial future. So, let’s dive into some tips that can help you achieve financial independence.
First, create a budget. This is crucial. It might seem like a chore, but trust me, it’s worth it. Start by listing your income and all your expenses, including your fixed expenses like rent and utilities, and your variable expenses like groceries and entertainment. Seeing everything laid out in front of you can help you identify areas where you can cut back and prioritise your essential expenses.
Next, live below your means. This doesn’t mean you have to deprive yourself of everything you enjoy; rather, it means being mindful of your spending habits. Before making a purchase, ask yourself if it’s something you truly need or just want. It can be tempting to buy things to fill the void of not having a job yet, but try to resist that temptation and focus on building a solid financial foundation.
Another important step is to save regularly. Even if it’s just a small amount each month, it can make a big difference in the long run. Consider opening a savings account and setting up an automatic transfer from your checking account. This can help you build an emergency fund and save for future goals, like a down payment on a house or a dream vacation.
Debt can be a major obstacle to financial independence, so try to avoid taking on any unnecessary debt. This can be easier said than done, especially when unexpected expenses arise. You can start building up your emergency fund with the Ladda app to avoid borrowing when you’re in need.
As you embark on your financial journey, keep in mind that financial independence is not a sprint; it’s a marathon. It takes time, effort, and patience to achieve your goals. But the good news is that every step you take toward financial independence brings you one step closer to a brighter future!
So, go out there, make a plan, and take action! And remember, if you ever feel overwhelmed or unsure, there are resources available to help you along the way. From personal finance blogs to financial advisors, there are plenty of experts who can guide you on your journey. Wishing you all the best on your financial journey!
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MoneyAfrica premium plan
Are you a mid to high-income earner? Do you find communities a bit too busy? You should sign up for our premium plan.
You can learn more about that here.
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We often get questions regarding how to plan your finances to align with your relocation plans, especially for students seeking to further their studies. As always, we have heard you, and we have put together an e-book to help you navigate this. Follow this link, to get your FREE copy of the e-book: The Japa Encyclopedia.
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