Personal Financial Planning for Women [I]

In 2019, I met a young lady who owns a beauty salon in the city of Lagos, we got talking and I discovered Taiwo is very prudent with money and also very hardworking. I asked her where she got her skills from knowing that she did not go beyond the primary school level.

She narrated a beautiful story of her grandmother who she lived with as a young 5-year-old when she lost her biological mother.

Taiwo said, “Aunty everything I know about money today, my grandmother taught me”. She taught me how to keep a percentage of any money I receive for different purposes. She mentioned that whenever anyone gives her a monetary gift, the first thing she does is to take it to give the money to her grandmother who shows her how to allocate the money on a percentage basis. She said 10% was for God, 10% for Ajo ( a group contribution); Esusu and Ajo is an age-long practice; It describes traditional forms of cooperation in African societies whereby groups of individuals contribute to informal savings and credit associations for their mutual benefit. These associations are found mainly in agricultural production and credit financing, and they substitute for and complement modern cooperative institutions and formal financial systems.

The practice is believed to have originated among the Yoruba people of Nigeria and to have spread from there to Liberia, the Democratic Republic of Congo, and most of the West African countries. While known as esusu or esu among the Yorubas in south-western Nigeria, the practice is called etoto by the Ibos in south-eastern Nigeria; adashi by the Hausa people in northern Nigeria; dashi by the Nupe people of Nigeria’s Kwara and Niger States; osusu by the people of Ogoja in Cross River State; isusu by the Igbos from Abia, Anambra, Ebonyi, Enugu and Imo States; asun by the Ishans of Edo State; etoto by the Ibibios of Akwa Ibom State; bam by the Tivs of Benué State; tortine in Cameroon and Niger; and susu in Ghana. [You can read more on informal financing-wiki-index]

Taiwo also keeps 10% as gifts for the poor(her grandmother was a sucker for charitable activities) she was very religious and believed whoever gives to the poor is lending to God. The last percentage she keeps to buy things for herself and her siblings.

Her story opened my eyes to see that personal financial planning (PFP) is not a new practice or lifestyle. You need not have a formal education to be able to plan your finances. Taiwo’s grandmother had an informal knowledge, without any western education about financial planning and she also tutored her grand-child to do the same.

So don’t get all worked up on issues about financial planning and thinking it is a westernized practice.

The first step of PFP is knowing what you want. Note that there is no one size fits all. Be comfortable with your plan and know that this will be different from someone else’s plan. Don’t stress yourself out trying to meet someone else’s financial plan. This may sound funny, but some women are working with someone else’s financial plan.

You hear women say, I want to walk in my mother/friends’ shoes and be like her and achieve more than she achieved. As much as your mother/friend may be your hero and mentor, remember you now live in a different generation and exposure. So “DO YOU” and plan your finances while at it.

If you can spell out what you really want, make sure you write them down with confidence and follow-through.

A wise man once said “that discipline, organization, and planning are timeless habits for achieving wealth”…in the book “The richest man in Babylon”[a self-help and wealth management book written by the renowned writer George S. Clason. The parables in the book was told by a fictional Babylonian character called Arkad, a poor scribe who became the “richest man in Babylon”. Included in Arkad’s advice are the “Seven Cures” (or how to generate money and wealth), and the “Five Laws of Gold” (or how to protect and invest wealth). A core part of Arkad’s advice is around “paying yourself first”, “living within your means”, “investing in what you know”, the importance of “long-term saving”, and “homeownership”. {find this book, it was written in 1926 but still relevant]

As we cross over to the new year, know that having a concrete financial plan is the way to go. Wealth does not stumble on anyone; it only comes to those who plan, who expect and work hard for it. Make a plan with the end in mind. Take a look at how you intend to end 2022.

As you do that, make sure you set up a measurable goal; setting this will leave no room for confusion and will help you stay on track. For instance, if you want to plan for a vacation and you need one hundred thousand naira, you can start saving ten thousand naira every month, and by the end of 10 months, you’ll have enough money to go for your vacation. Working with a target in mind will help you set that goal in mind. But, goal setting is not limited to only vacations alone, it can be anything – planning your wedding, saving for your child’s education, starting your own business, or pursuing higher education. It all starts with keeping the end in mind.

Start on a clean slate as you prepare for the new year. Feel free to share your baby steps with me.

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