A Personal Finance Roadmap for Beginners 2

An easy 12-step guide to your financial freedom

Agatha from The Wealth Tribe
8 min readJun 11, 2020

Good news! I completed and passed (I got an A!) the online accounting course.

Confession! I had been procrastinating taking the final exam since mid-April because of fear. I wasn’t scared of failing the exam. I just kept making excuses in my head to justify the procrastination.

As opposed to the traditional school learning style where we have to memorize concepts, be afraid of failure, afraid of teachers and study for the purpose of passing the exam, my approach when taking this course was different. I was going to learn at my own pace. Thoroughly enjoy the learning process. Ask as many questions as possible until I’m satisfied that I understand. Learn, for knowledge sake.

I always asked questions and asked for more examples. When I felt that some questions would be better phrased or needed corrections, I’d tell the instructors. While at it, I wasn’t in competition with anyone. Some students finished the course before I was halfway through, but I stuck to my pace.

As much as I knew I’m not the sharpest when it comes to Math, I wasn’t going to let that stop me. I have learnt that to succeed in this thing called adulting, all you need to do is pick the identity that you desire and prove to yourself that you’re it. I identify as an investor. Taking this course was my way of voting for and validating that identity.

My bestie sent me a review of the book Mindset by Carol Dweck. He does this thing where he reads a book then writes a detailed summary and shares it with his friends. Everybody deserves such a friend! He wrote;

“The thing I like about this book, it covers a simple concept that can be summarized into a single sentence. Some people have a fixed mindset, which emphasizes their traits, while others have a growth mindset, which tells them that all their qualities as human beings are a work in progress, and everything ranging from human interactions to academics needs one to actively invest time and focus to get better at it.”

Here are the topics covered in the course:

  • Accounting fundamentals 1: Intro to accounting & elements of financial statements ( assets, liabilities, expenses and revenues)
  • Accounting fundamentals 2: Analyzing accounting transactions and creating journal entries-debits & credits!)
  • Accounting fundamentals 3: Accrual accounting.
  • Taxation and understanding risks (Taxation is customized for Kenya, Uganda, Tanzania, Ghana and Rwanda)
  • Internal controls (how to mitigate and control risks)
  • Cash receipt process
  • Cash disbursement process
  • Excel
  • Bank reconciliations
  • Month-end and Budgeting
  • Quickbooks online
  • Interviews and CVs

I’m not an accountant and so far have no aspirations to work as one, but this course gave me an in-depth understanding of how businesses operate. This is crucial knowledge for any investor.

Some topics such as budgeting, excel and bank reconciliations added to my personal finance management skills.

Since I do personal finance consulting, the knowledge from this course will help me manage my cash flows when I start making big bucks (Amen?)

The course costs $40. While we’re on that growth mindset, this is not a cost. It’s an investment. Continuous learning is a need just like food, shelter, and clothing.

You can pay the $40 in 2 instalments. The first $20 instalment before you start and the second $20 instalment after 7 weeks of learning.

Register here. I highly recommend it. And the growth mindset book too.

(This edit was added on 15th June>>> The guys at Haystack Africa will give you a $5 discount if you use my name ‘Agatha’ as the coupon code while paying for the course.<<<)

You can halla agatha@thewealthtribe.com when you register. Or for any questions, clarifications, or just a friendly personal finance chat.

You can’t guarantee success but you can guarantee failure: never try. — James Clear

Aaaaaaaaaaanyway, back to the topic of the day; personal finance roadmap for beginners. Part 1 of this article is here in case you missed it.

7. Medical Insurance

I once worked in a company that had zero structure. Nothing was certain. Not the morning reporting time nor the JD. In fact, there was no contract. The pay wasn’t certain, sometimes the boss would give me all these explanations as to why I’d be getting a smaller salary as compared to the previous month. They didn’t even pay my taxes for the first three months.

My job description was a trainer but at some point I found myself being asked to babysit kids and water flowers in the office. I’m no kidding! I was playing multiple roles; trainer, social media marketer, sales, an accountant with zero accounting experience, babysitter, etc. Which was crazy because I had moved from a job that had clarity.

After a few months, I snapped out of it and started making demands. I knew I was good at my job (training) which gave me the confidence to make demands. I asked for a medical cover as a bare minimum. There was no way I was going to be doing so much and still worry about my health. And risk going even deeper into debt if I got sick.

One of the perks of being financially conscious is that it enables you to confidently negotiate better terms for yourself. Because you know what you stand to lose if you don’t.

Having a medical cover makes you less worried in case you fall sick. Healthcare is expensive almost everywhere in the world, especially in countries where this basic need has been privatized.

I have never had to pay for my health insurance. Or rather, I have never had enough money to afford it. My best advice for this since I don’t have extensive knowledge on health insurance is:

This saves you a lot of money if you have to pay the bill yourself. You can put this money towards your savings or investments.

You don’t want a situation where you have to worry about your illness and also worry about making numerous approval calls from the insurance company.

Check online reviews and talk to people about the company.

Sickness is one of the emergencies that can be covered by this fund. Having one enables you to rest easy because you know that if anything happens, you can pop into a hospital and afford treatment. At least for the most part.

It also enables you to afford annual dental check-ups, gynaecologist/urologist visits, glasses and such which all affect the quality of your life.

One day I’ll write about my traumatizing experience when I got a free pap smear in a government hospital. For now, all I can say is that the experience made me swear to manage my money better so that I can always afford such services.

8. Invest

I have written a few articles on this:

Slow and steady often wins because it keeps you motivated. Take on manageable challenges and you’ll get frequent signals of progress. Bite off more than you can chew and progress stalls. — James Clear

9. Pension/retirement fund

I had a conversation with a man who recently retired. He shared that even at 60, he’s still putting money into his investments. I was puzzled.

‘Isn’t this the time you should be chilling and eating your money pole pole?’

He said that he still feels physically strong at his age to keep working in his businesses and admits that he doesn’t have enough money to cover him and his wife. He doesn’t want to be a nag to his children. As much as he’d love to stop working and to travel more, he can’t afford it.

He also added that most of his agemates are in worse conditions. Some retire into poverty.

Don’t be one of those people who starts thinking about retirement when you get the letter from HR. It’s not too early to start thinking about retirement. The sooner you start, the more money you’ll have for retirement. Which also means you get to take advantage of the magic of compounding.

My motivation to start early is that I want to retire early. I can’t imagine having to wake up at 6 am at 40 and still have a boss I’m scared of. I want freedom asap.

This is also a reminder to check with your employer if they have a pension fund. Sign up for it and contribute the most that you can. Sadly, my current employer doesn’t provide one.

10. Life Insurance

I don’t have one. I’m still debating about whether this is for me because I don’t have dependents. And I don’t see myself getting some in future.

In the meantime, this is a great article on understanding life insurance.

A goal is a desired outcome with a plan for achieving it. Create strategies, not goals. — James Clear

11. Write your will

Death is assured. It’s not an ‘if.’

You want to be in control of who gets your money or property when you pass on. We’ve all seen or experienced enough drama when loved ones die and people finally show their true colours.

This pandemic is also a reminder that death can come knocking unexpectedly.

That being said, I don’t have a will. It’s on my 2020 to-do list.

12. Giving

Well, you shouldn’t wait until you’ve amassed loads of wealth for you to give.

But this came last because I think having enough money to change the world should be a good motivator to work hard.

Other things you should do as you work on the above

  1. Audit your finances regularly.

2. Track your net worth.

3. Improve your skills. Increase your ability to earn.

4. Buy a home. I’ll leave you to decide for yourself whether this is an investment or whether it’s important or not. I plan to buy one for myself.

5. Educate yourself ruthlessly.

The above list doesn’t cover everything. For example, if you have kids, you should add a college fund.

Financial freedom is a long journey. The sooner you start, the easier it gets. It’s doable.

Set small goals. Stick with it. And celebrate your milestones.

On being uncertain, all of us have uncertainty. Especially during this pandemic. People who had ‘permanent’ jobs have been laid off. The trick is to recognize the uncertainty and progressively work around it.

Remember that you can do multiple things at the same time. Budgeting allows you to do that.

In conclusion, don’t buy personal finance knowledge on wholesale.

Read, do your research, talk about money and listen to other people’s perspectives. But in the end, you have to pick what works for you.

Originally published at https://www.thewealthtribe.com on June 11, 2020.