“Too many people spend money they have not earned, to buy things they do not want, to impress people they do not like.” – Will Smith

The current education system will teach you skills that will make you employable and work for money. There are two things that I dislike about this system: they do not teach you how to manage that money (financial literacy) and they do not focus on making you an entrepreneur so that you can create jobs for those who could not go to school. I believe there is more to life than just going to school, graduating, getting a job and living on a monthly pay cheque one after another. I had a role model who was two grades ahead of me in high school. He passed his matric with flying colours. He went to university and finished his degree in record time. Today he is no longer my role model because he turned out to be financially illiterate. I do not see progress in his life. He is earning a lot of money but becomes broke before the end of the month. Most of us with working parents grew up in households where the exact same thing was happening. Most of our parents cannot even account for their money. Adverts have succeeded in making us buy and spend money on things we do not even need.

Some children will never end up poor. One of the reasons being that their parents understand the importance of financial literacy hence they teach it to their kids from an early age. They give them less pocket money on a monthly basis. This in turn compels the kid to budget and manage money in a manner that sustains them for the whole month. There are few people who have managed to build nice houses and are enjoying their lives even though they are not earning a lot. And there are people who are earning more (like my ex role model), but are forever in debt. There are people who earned less for a while and then all of a sudden they are running their own businesses. The difference between these people is the level of their financial knowledge.

At university level, some students are getting involved in stupid things because of a lack of this knowledge. They are selling drugs, dating older men and older women, lying to their guardians to send money for books, etc all in the name of money. They mismanage the money they have and now they have to do whatever it takes to survive. Lack of financial literacy can be blamed. Avoidable bad things must be avoided, be financially literate. With a tertiary qualification, you will neither be poor nor rich; you will be a middle class citizen. You will die there if you are not financially literate. The more financially literate you are, the more likely you are to be rich. It might not be within the schools curriculum, you still have to go an extra mile.

You need to read and know your money; what is money, what influences the buying power of money, how and where can you invest it, why is it important to save money, how do you allocate it, how to budget, etc. These are some of the things you should know. If you do not tell your money what to do for you, it will tell you what to do. Imagine being controlled by something you do not even understand. We witness the repercussions of financial mismanagement every day. How many sports stars, musicians, or entertainers do you hear about having died with nothing to their names?

These are people who made millions in their prime, drove ashy sports cars, stayed in 5 star hotels and had all the women (I am not jealous). What is really sad about all this is that when these people retire, they retire to their parents’ houses. They sleep on the same bed that they left when they begun their short lived fame. I am not saying that there is anything wrong with being famous; I am saying that your worth should not be your ashy cars and women, but assets that appreciate in value with time.

You are in matric, you are in a better position to start learning how to handle money as opposed to when you are working or running your own business. Most of our role models started small and early with their careers. Steve Jobs started Apple in a garage, Standard Bank was a small stokvel. Starting early helps in that it gives you an opportunity to do something over and over again until you become an expert at it. Starting small also enables you to crash and burn so as to learn from these experiences. Failure is a required component of success and business. This is one of the reasons why people with more work experience are paid more than those with less. Starting small helps in that you get to master the necessary fundamental concepts and the necessary growth in confidence. On what basis do you even start to believe that you will be able to manage a store like Shoprite if you fail to manage a tuckshop behind your house? If you cannot manage the R100 that your parents give you per month, how will you manage a monthly salary of R40000? It is very important that you use the time that you have in high school to learn the way you should manage your money. Varsity life is tough when you are broke. Mind you, you will be responsible for making sure you eat, you have clean clothes and have money to print your assignments. If you mismanage your money, you will starve and you will probably not submit some assignments. You will then be forced to borrow money from friends. When you get money, you will have to pay debts and the cycle will continue. You will not be able to save and you will be poor!!!

Money management is an application of financial literacy. The principle of starting small works everywhere, even in personal money management. Money management is about understanding how your cash flows and how you can take advantage of that knowledge in order to better your life. Maybe you might want to separate your savings into two groups: `your slave’ and `your worth.’

First of all you need to decide on your minimum i.e. the minimum amount of money you can have. For example, you should decide this amount in this way, “If I say that I’m broke, I’ll be having R200”. This is your insurance. You only spend this money when there is nothing else, then you are beyond broke. You can choose to increase it as your worth increases. I remember when I was in my third year of study at Wits. I was expected to work on an important project during the vacation period. Since the university accommodation had been closed, I neither had a place to stay nor did I have food to eat. I was fortunate because I had my minimum. It was enough to cover me until the completion of the project. I did not have to ask for money from anyone. After spending the minimum, you should make sure you raise it when you are financially sorted. If you have this amount, you will be able to go through unexpected things in your life without depending on anyone. Even working class people are encouraged to have enough ‘minimum’ to sustain them for at least six months. This means that if they unexpectedly lose their source of income, they will be able to sustain themselves for at least six months. They should be able to find another source within that period. If you cannot do this now, on what grounds do you even start to believe that you will be able to do it then? It is not about the amount, it is about the principle.

Your worth is the money that you put aside whenever you get money. You should decide on the percentage and stick to it. For example, I will put aside 10 percent of whatever money I get. When you get money, this should be your first expense. This is your insurance. The feeling that you get from knowing that you have money is priceless. After graduation, some companies will only pay you at the end of the month. This means that for the whole month you are expected to get a place, cover groceries, clothes and/or transport by yourself. The last thing you want is finding yourself in unnecessary debt.

Let’s say you have decided on your minimum and you have it somewhere. This month you receive R1000 and you take R100 (10 percent) to your worth. Out of the R900 left, you spend R700 on whatever. The remaining R200 is the slave, you can afford to lose it. This is the money you gamble with. If you have a business idea that you would like to try out, this is the money that you would use.

“Empty pockets never held anyone back. Only empty heads and empty hearts can do that” -Norman Vincent Peale

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