MONEY MISTAKES

Time is what we want most and waste the worst,” observed writer William Penn. Our spending habits are another classic paradox of something we so passionately pursue and then so inappropriately dispense.

And this despite the availability of financial facts, trends and reality that would propel one towards achieving goals and ultimately financial security and freedom.

Many are still making bad or self-depreciating decisions that are regressive rather than progressive in the long run.

*Sue has been working in a bank for almost two years now after getting her first degree. She considers herself quite financially savvy and has her plans well laid out.

She intends to take out a loan for a new car and move out to a better location where her car will be safe, and perhaps take a home loan after that.

*Patrick, a first-time father, says his priorities have to change to give his son the best chance at life. So he has opened a junior savings account in which he intends to deposit money often.

And he certainly agrees with spending more time at home now but doesn’t agree with his wife about cutting down on going out on weekends or evenings with his colleagues and friends.

Furthermore, he does intend to take out an education policy with an insurance company when the boy is a little older.

*Millie, a public secondary school teacher in her early fifties, doesn’t agree with her advisor at the bank where she wants to take a mortgage about where she should buy a home.

She has been shopping for a house for months and has chosen a three-bedroom apartment in a secure, serene court off Mombasa Road.

Her mortgage advisor feels she should consider her remaining working years and go for a home in another location such as Athi River or Kitengela or take a construction loan and put up a house there so that she is not struggling with a loan on retirement.

Millie intends to teach in a private school upon retiring and is, therefore, confident that she can handle the mortgage.

Mr Danson Mutethia, an investment consultant with Fortune Advisors, points out the flaws with all the above plans and other mistakes we need to stop making that create roadblocks.

1.Here is the first commandment in financial management that most of us know but ignore – live on less than you earn.

“Carefully draw the line between things you want and things you need so that you see where you can cut down on expenses, especially in circumstances that include a new addition to the family,” Mr Mutethia emphasises.