Overcoming Money Mistakes – Smart Money Africa

EPISODE 1 – The Smart Money Tribe Podcast

The first episode of The Smart Money Tribe Podcast kicks off with Arese talking about money mistakes and how to overcome them.

“Learning from your mistakes is always a great place to begin when you want to revamp your personal finances”, she says.

As someone who had to learn from her personal finance mistakes, she walks us through some of her money mistakes and shares tips on how she overcame them.

The first mistake that Arese talks about is the habit of saving to spend as opposed to saving to invest.

Speaking of saving habits, she says, “I‘ve been really good at saving towards important financial obligations like rent and even better saving towards lifestyle expenses like buying a Chanel bag or paying for a holiday but I wasn’t saving enough towards assets that could protect my financial future”.

Profound righttt!

She further states that it is important to save to invest because saving to invest helps to improve your net worth, which is a measure of financial success.

Arese goes on to share her second money  mistake which is; not having separate and specific savings accounts, each targeted to a particular goal.

She stresses the importance of having separate savings accounts for each savings goal like rent, holiday, emergencies or even retirement.

In her words; “by organising my money I now had clarity around where my money was going and it helped me save more efficiently and more importantly I had a clearer understanding of what I could afford and what I could not afford at any given point in time”.

Lastly, Arese talks about underestimating the need for an emergency fund.

For her, it’s not just about having an emergency fund. It is prioritising the fund and replenishing it when you take from it to fund an emergency. 

Arese advises Africans to have at least 9 – 12 months in living expenses in emergency funds as this reduces your chances of having to dip into your investments to fund emergencies.

She says, “it’s not necessarily there for money making, it is there to protect your long-term investments from short-term unexpected expenses”.

Some of the key take aways from the podcast are:

1. Know your net worth. You can calculate this by adding up all your assets  and subtracting what you owe.

2. Financial success is not about how much you earn but how much you can retain and grow.

3. Emergency funds are an important tool in  one’s financial life.