Why is financial literacy an essential tool for you?

What exactly do you want out of life? Close your eyes for a minute and imagine it. Is it to fly yourself, first-class, to a destination of your choice? Is it international school education for your kids? A beautifully plastered, classy home with the best views? What does financial freedom really mean to you? 

By now I am sure you have something in mind . So, what is the plan regarding your financial literacy? How do you plan on bridging the gap between where you are now and where you want to be? How confident are you in your ability to make, manage and multiply your money?

By now I am sure you have something in mind . So what is the plan regarding your financial literacy? How do you plan on bridging the gap between where you are now and where you want to be? How confident are you in your ability to make, manage and multiply your money?

Financial literacy in Kenya and across the globe

Financial literacy is not an innate skill. In fact, a global survey points out that only 33 % of the world’s population is financially literate. These statistics indicate that 3.5 billion individuals around the world, with a majority of them coming from developing economies, do not have access to financial literacy. 

A closer look at our locality shows that we are not faring well in this area either. Research shows that 7 in 10 bank account owners in Kenya are living above their means and are neck deep in debt. Further, despite being employed, 79% of Kenyans are not part of any retirement benefits scheme. A lack of a financial plan and the inability to eradicate debts shows that there is a gaping gap when it comes to financial literacy within Kenya.

Living from paycheck-to-paycheck is an inadequate system that leaves most people scared and frustrated. Yes, you are earning an income. Yes you are paying your bills, you might have the basics covered but find that your money is not working for you.

Possessing financial literacy skills will help you better understand,  manage your finances and make more money. A person who is financially literate will be able to expertly navigate our current tumultuous economy.

Why you need financial literacy in the current economy

1. High Rate of Inflation

The price of fuel in Kenya just hit an all time high of KSH 179. The current rate of inflation in Kenya is 7.9%. This is a dramatic increase from April’s 6.5%, and is the highest we have seen in a really long time.

Because of the high rate of inflation, organizations are forced to maintain their cash reserves and some will often have pay cuts , not reviewing salaries or even worse laying off some of their employees . This means that you need to be prepared to handle hard financial times. Knowing how to multiply your income streams, where to invest, how to budget, which methods of saving are more effective, how to track expenses etc. will come in handy in our current unstable economy.

Your ability to make informed financial decisions comes from the financial information you possess. We all want to reach a point in our lives where we no longer have to slave for our money. We want to see our money working for us. We want to be able to go on long vacations to our dream destinations without having to worry about the budgets and costs. The only way we can get to this point is by learning how to manage and invest our money , learning how to grow our money.

2. High number of defaulted loans contributing to country’s economic recession

A statistics report released by the Credit Reference Bureau shows that there are 17 million people listed on the platform and that the majority of these individuals are youths. The same report states that youths have come up with creative ways of getting new mobile loans despite not having paid old ones i.e., getting rid of the sim card that is linked to a mobile loan.

While it is hard to utterly ignore the level of creativity employed in the aforementioned schemes, it is impossible to turn a blind eye to what defaulted loans are doing to our economy. By not paying loans and taking on more loans (and defaulting these ones as well), youths are contributing to economic recession. This ultimately leads to a reduction in business growth and consumer spending.

3. High number of irresponsible adults in the current economy

You are probably wondering, how do you become a responsible adult? Simple, become financially literate. People  who do not get a chance to learn about finances end up becoming irresponsible adults. They struggle with investing, managing debt, saving, etc. 

Lack of financial literacy can also cause you to develop bad financial habits such as reckless spending, becoming prey to pyramid schemes or rather any scheme promising quick and easy cash. Someone who is financially literate can separate the chaff from rice, making healthy financial decisions for themselves and their loved ones.

Where can I learn financial literacy as a youth?

As a young adult, you want to be able to learn how to manage your finances in an environment that is relatable and convenient. Well, look no further! The Kuzah platform offers youths a chance to achieve much-needed financial freedom.

Kuzah is a Kenyan-based organization that is focused on guiding youths on their financial journey. Think of your finances as a dark, daunting jungle and Kuzah as your illuminated guide.

Kuzah offers financial literacy classes that assist individuals in demystifying financial concepts. Through these sessions, you will learn how to develop a healthy money mindset, practical skills on saving, budgeting, investing and managing your finances. Additionally, you will get to understand the vitality of starting to plan for your retirement now rather than later. Further, these financial literacy classes allow you to visualize your financial future and how you can attain your hairy, bodacious financial goals!

Kuzah’s financial literacy sessions are curated in a manner that helps you hold on to and grow your money. 

Register today and start your journey to financial freedom!