Personal Finance Management Training Slides

1. Facilitated by
Daro
PATRICK

2. TRAINING
OBJECTIVES
Understand of financial literacy. What is it and what does
it encompass?
Understand how to effectively carry out
financial planning.
Be equipped how to cultivate and maintain a
savings culture.
Be equipped on importance of investing and different
investment vehicles.

3. “A Journey of a
thousand miles begins
with a single step”

5. ICE BREAKER!
 Have you computed your current net worth?
 Have you been paying yourself first?
 Can be able to handle an emergency of 200-
500 USD?

6. What comes to your mind when you
hear the word financial
literacy?

7. Definition,
 FINANCIAL LITERACY IS THE ABILITY TO UNDERSTAND AND
EFFECTIVELY USE VARIOUS FINANCIAL SKILLS, INCLUDING
PERSONAL FINANCIAL MANAGEMENT, BUDGETING AND INVESTING.
 POSSESSING THE SKILLS AND KNOWLEDGE ON FINANCIAL MATTERS
TO CONFIDENTLY TAKE EFFECTIVE ACTION THAT BEST FULFILS AN
INDIVIDUALS PERSONAL NEEDS , FAMILY AND THE GLOBAL
COMMUNITY GOALS.

8. Is the process of wisely
managing your personal
finances so that you can
achieve your goals and
dreams
Financial
Management

9. z
Financial literacy
Is a set of skills and knowledge, attitude and behaviors
that allows individuals to make informed and effective
decisions regarding money matters.
Main purpose/goal: To achieve individual financial
wellbeing by changing from our current behavior to the
desired behavior.

10. Current behavior
• Lives on a day-to-day basis/
Hand to mouth.
• Savings not linked to
savings goals
• Borrows for emergencies
• Can’t choose the right
investment
Desired behavior
• Make a spending plan,
budgets and uses it to
manage finances
• Has a savings plan with clear
goals
• Maintain an emergency
savings fund
• Choose the right investment

11. Why is it important to be financially
literate?
 One can effectively manage money
 Understand credit and debt management
 Have money to meet emergencies and for other important
things
 You will be able to convince others to lend you money
 Have general knowledge r e g a r d i n g f i n a n c e s
 Develop confidence and attitude that enables one to be s self-
reliance
 Enables one to discuss money and financial issues
constructively
 Make good financial choices about saving, spending and
managing debt.

12. Financial plan
 A comprehensive picture/road map of your current finances, your
financial goals and any strategies you've set to achieve those goals.
‘It’s not about choice it’s about action’

13. Basic concepts in financial planning
 Budgeting-the process of creating a plan to spend your money. Balancing your
expenses with your income. This spending plan is called a budget.
 Saving - income not spent, or deferred consumption by putting money aside in, for
example, a deposit account, a pension account, an investment fund, or as cash.
Putting money aside.
 Investing- is the act of distributing resources into something to generate
income or gain profits. Putting money to work.
 Debt management-is a way to get your debt under control through financial
planning and budgeting.
 Financial Accountability-responsibility for the way money is used and
managed/good stewardship

14. Key steps to draw upabasicfinancial plan

15. Step 1: Assess your financial
situation
 With a clear understanding of your current financial
situation, you can decide where you should start from,
and what you need to achieve your financial goals.
 Knowing your net worth is important to assessing
your financial situation.
 Start by making a list of all your assets as well as your
liabilities. Net worth is broadly calculated as your
assets minus your liabilities.
“Start where you are with what you

16. Step 2: Create a budget
 Prioritize your needs and wants and look for any
unnecessary expenses you can cut to save
money.
 Refrain from overspending especially impulse buying.
 Before you decide to borrow money, make sure you
can afford new debt repayments on top of your
current expenses or commitments.

18. Step 3:Set your financial goals
 Ensure they have numerical targets
 Break goal(s) into periodic targets i.e annually,
quarterly, semi annual

19. Determine your short,
medium and long term goals

21. Step 4:Know your risk tolerance

22. Step 5:Work out and implement a basic
financial plan
 Educate yourself ie work with a financial
consultant or attend a training
 Start! There’s no perfect opportunity! Start with
what you have and where you are!

23. Step 6:Regularly review and adjust your
financial plan
 After formulating a financial plan, you should exercise
strict discipline to follow the plan.
 Review your existing budget and investment portfolio
from time to time to make sure they still fit your
needs.

24. Factors that influence one’s personal
financial planning
 Spending behavior
 Savings and investments
 Type of financial adviser you have
 Family size/Relatives
‘‘The wealth of an individual is the wealth
of a nation“

25. Benefits of financial planning
 Money availability
 There is peace of mind
 Accountability
 Confidence
• Spendon day-to-day needs such as food,
housing, transportation, clothing, healthcare, debt
repayment, and other non-essential needs such as taking alcohol
 Save money for unexpected expenditures e.g emergencies,
medical bills, death,
someone selling their property due to an emergency
• Investing money in income generating activities to earn income
over the long- term.

26. We are all a function of how
we can make, manage and
multiply money.

27. Budgeting
 It is a summary of estimated income and expenditures
over a specified period of time
 Telling your money where to go instead of wondering
where it went.

28. Steps to budgeting
 Create budget beforehand
Review your financial goals
Estimate amount of income by source
List all expenses and amount needed for each one
Make sure your expenses are not more than your income
Decide how much you will save
Review and adjust as needed
 Understand that every month won’t be the same
 Budget using the money you know you will get for sure,not what you hope or wish you will
get.
 Pay yourself first
 Track your spending
 Focus on progress over perfection

29. z
Daily Cash Tracking

30. How to stay within your budget
• Remind yourself often what you planned to spend
• Put in the budget something for unexpected spending needs
• Keep savings out of reach so you do not spend them
• Keep track of what you spend
• Make sure you do not spend more than what is budgeted
• If you spend more for one item, spend less for something else
• Make a list of ways to cut planned expenses
• Get the family to participate in developing and sticking with the
budget
• When investing money in business, consider what to do if
the investment
fails

31. The 50-30-20 Budgeting rule of thumb
Budgeting rule

32. 50%-Mandatory bills and expenses
30%- Savings, Investments and Debt repayments
20%- Wants, entertainment ,givings and miscellaneous

33. Savings

35. What are savings?
• Money that is put away in the present for use in the future
• Investments in animals or land that can be sold when cash is
needed
• A way of building assets
• A fundamental part of moneymanagement
 Saving is putting money aside for future use and spending.
Saving can be in form of cash or an asset.

36. GROUP WORK!
Make a list of some good spending and saving practices

37. Good spendingandsaving practices
• Make a budget for the coming week or month. This means that you list the
expected money coming in and going out, and that you plan what you will do
with the money. Plan how much you will save every day, week or month.
• Stick to your saving plan!
• Before spending your money, ask yourself if you really need the
item you
want to buy
• Don’t buy it if you don’t need it
• If you don’t spend money that you think you should, put that money on the
side for later use. Don’t just spend it because you can!
• Even saving a small bit of money is better than saving nothing
• Keep records of how much you actually saved and spent every day,
week or
month
• Look at your spending habits and determine how you can cut them down so
that you can save more

38. Different ways to save:
 On an account in a commercial bank. This is a formal way of saving money.
They are a safe option for keeping your money. They come with a monthly or
yearly fee.
 With aSavings andLoan Association (SLA) or any other self-helpgroup.
People from the same village or farmers group save their money together to
make the money grow. SLAs give out loans to members and collect interest.
The money generated from interest repayment is then shared among the
members.
 With aregistered Financial Cooperative (SACCO). A SACCO is aSavings
and Credit Co-Operative. This is a legal entity with formal and de-fined
structures and systems.
 Mobile banking, Locked savings
 Homesaving, inabox/tin, underthe mattress, or inahole underthe soil in
the house.This is the least safeway of saving.
 Assets suchaslivestock andlandare amethodof saving becausethey hold
value andcanberesold (forthe sameamountofmoneyat purchasingor
more)atalatertime.

39. Rule of thumb to saving:
• Save as soon as you earn. That is, put
the savings aside before spending
• Try to save 10%-20% of your income
• Don’t carry a lot of cash, avoid the temptation to spend it!
• Keep savings out of reach in a safe place
• Good savings behavior requires discipline
• Discipline is learned through practice!
• Spend carefully
“Financial freedom doesn’t happen by mistake, it happens by
design“

40. Call to Action!
What do you want your money to do for you?

41.  Save more? Open a savings account, decide how
much to save and start
 Invest more? Open investment and brokerage a/c,
decide how much
money to put in and allocate in your budget
 Track spending? Download tracking apps/ Create
excel sheets
 Start doing it! Less talk, more action!

42. Start the Journey now !
 Think big, start small andstart now!
 Progress over perfection!

43. INVESTMENTS
 An investment is an asset or item acquired
with the goal of generating income or
appreciation.
 The act of putting money, effort, time, etc. into
something to make a profit.
‘To be more, we must become more’

44. Why should I
invest?
 Grow your money/earn higher returns
 Save for retirement
 Reach financial goals
 Start and expand your business
 Fulfillment
 Impact
 Freedom
 ‘Wealth is the ability to make choices you can support
financially, live a lifestyle you value and contribute to society
in a way that has meaning to you’

45. Savings and Investment
Vehicles
“Wealth can only be created in the context of time.
If we cannot manage our time, we cannot
create wealth“

46. Equities
These are shares in a company. Are the same as stocks. Therefore, if you buy
stocks you are buying equities.
 The key objective is to sell shares when price is higher than when bought or
received dividend payments.
 Equity investment – money that is invested in a company by purchasing
shares of that company in the stock market.
A) Public equities: Shares listed on a stock exchange
B) Private equities: Shares in companies that aren’t listed on the public stock
exchange.
Have a strong understanding of the nature of the business & confidence in
management.
Equities carry higher risk and are recommended for long term investments

47. Fixed Income
Treasury bonds and Treasury bills
 Instruments issued by the government to borrow from thepublic.
 They offer a fixed rate of return referred to as interest.The
longer the instrument, the higher the return
 T-bills are issued for 91,182 and 364days
T-bonds are issued for 1 year up to 20 years
Corporate bonds
 Operate same way as T-bonds but issued by private companies
 Due to high risk associated, they offer higher returns thanT-bills
and T-bonds

48. z
Fixed deposits
Accounts
 Are available in banking institutions and are similar to savings
a/c but fixed for certain periods.
 The longer the money is fixed for, the higher the interest
payment.
 They prevent one from misusing their savings & future
investment funds.
 Help foster financial disciplines & healthy money habits
Property
 Investments in property are usually in the form of land or rental
 property

49. z
Cash
Unit trusts
 Are pools of fund that are managed by professional fund
mangers on your behalf and placed in various investments.They
include equity funds; they invest in public equities
Objective is to grow
Money Market Funds
 They invest in low risk investments that can easily be converted
into cash s.a fixed deposits, T-bills, short term bonds
 Objective is to keep money safe.

50. Self
 The best investment you’ll ever make is in yourself.
 Learn a valuable skill and add value to yourself.
 Invest in knowledge

51.  Invest where you understand the market.
 You always have options; people, strengths, time, brand etc
‘It doesn’t come easy nor quick but it comes’

52. z
Considerations in
Investments
 Know why you are investing
 Know your investment time horizon
 Know the costs
 Understand the unit trust funds

53. z
Debt
 It is an obligation that requires one party, the debtor, to pay
money or other agreed-upon value to another party, the creditor.
 Also referred to as a sum of money that is owed or due.

54. Handling debts
 Understand what the debt was used for
 Refrain from taking new loans
 Make at least the minimum payment on all your loans to ensure
credit record remains clean.
 Make additional payments to reduce principal
 Minimize borrowing
 Understand that something has to give
 Get comfortable with ‘NO’

55. z
Inflation
 The decrease in the purchasing power of money.
 Currently at 9.6% globally

56. z
How to
deal
 Spend mindfully
 Find ways to increase your income ie side hustles
 Invest your money, don’t just save it
 Seek good sales deals, bonuses and discounts
 Avoid debt

57. z
 ‘I can change my circumstances,
because I can change me’

58. In conclusion
“Our deepest fear is not that we are inadequate. Our
deepest fear is that we are powerful beyond measure.
It is our light, not our darkness that most frightens us.
We ask ourselves, who am I to be brilliant, gorgeous,
talented, fabulous? Actually, who are you not to be?
Your playing small does not serve the world. We were
born to make manifest the glory of God that is within
us. And as we let our own light shine, we
unconsciously give other people permission to do the
same.” Marianne Williamson

59. Additional material
 The richest maninBabylon by George S. Clason
 The Psychology of moneyby Morgan House
 Broke Millennial –Erin Lowry
 Success habits by Napoleon Hill
 60 Principles of success
 Financial Intelligence, money budgeting and management by
Anderson M. Hill
 YouTube channels–SusanWanjiku & RinaHicks,Centonomy& Just
Ivy

60. THANK YOU!

61. Our contact and services
daropatrick@gmail.com
@patrick_daro
+211921-136-370 (WhatsApp)
+211920-526-552
Our services
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