Women Entrepreneurship

The African Development Bank held a workshop in Yaoundé, Cameroon to help foster women entrepreneurship. I grew up with a mother who was involved in everything, from running a taxi/tro-tro (public transportation bus in Ghana) business to buying goods wholesale and re-selling them for a profit.  She has always said that you never have real financial security unless you are signing your own check.  I hope to be as shrewd a business woman as she is one day. Anyway, check out information on the AfDB workshop here.

Saving effectively and spending wisely - input from those who are doing it and doing it well

Here are a few tips I garnered from several young successful Africans living both at home and in the diaspora:

1. Pay yourself first - set up a direct debit every month that takes money from you pay packet straight into a savings account, and make sure the money is difficult to access.  This way you won't be tempted to dip into it every time you reach a minor financial hurdle in your life.
2. Work on saving up an emergency fund that can cover your living expenses for at least 6 months in case you suddenly find yourself out of a job.
   
3. If you are going to go into debt, do it for the right reasons.  Borrow only to finance appreciating assets. For example, don't borrow a lot of money to buy a brand new car because the value of that car will start depreciating from the moment you drive it off the dealer's lot.  Do borrow money to buy land (even if you don't yet have the money to start building on that land), or to get an education which will ultimately increase your net worth in the job market.
4. Invest in the stock market through mutual funds as it increases your residual income. That is, you are still making money without much personal effort (from what I gather, it's a bit like receiving royalties as a writer, or a musician, etc.).
5. Start your own small business on the side - a restaurant, video rental shop, etc. - that can help bring in extra income.
   

Anyone out there have any other ideas?

A bank in Tanzania geared specifically towards women

 This bank in Tanzania is doing something new to empower women. Check it out at:
http://news.bbc.co.uk/2/hi/africa/8173353.stm

Be your own accountant - tracking your expenditure

If you have ever been part of a weight loss program or ever tried to lose weight, then you know that the one fact majority of these programs agree on is that writing down everything that goes into your mouth makes you accountable.  I have found that the same is true for managing your spending. Regardless of whether you are an overworked and underpaid student, or a young professional earning an entry-level salary, it is never too early to create a budget for yourself.

When I first started trying to manage my money, I scoured the internet for everything I could find on budgeting. Before you can start saving and investing, you need to know what your monthly expenditure looks like. Below is a synthesis of all the information I could find.  Remember that this is meant to be a discussion, so please feel free to jump in with your ideas and experiences via the comment section.

1. For the first month, write down every single thing you spend your money on, no matter how small or seemingly insignificant. Everything. For example, if you spent money on an entrance fee for a club one Saturday night, write that down, as well as money you spent on paying your electricity bill. This is to give you an idea of what you are spending your money on, and how much you are spending.
2. At the end of the first month, group your expenses into categories.  For example, money spent on clubbing falls into entertainment, while money spent on paying your electricity bill falls into utilities. Next to each category, write down the total amount you spent in a month on that category.  This way, you have an idea of how much money you spend monthly on each category.
3. Compare your monthly income (that is, whatever your take-home is AFTER taxes) to your total monthly expenditure.  If you are in the negative, or you are spending more than 90% of your monthly take-home, then it is time to seriously tighten your belt. 
4. Look at your categories and how much you are spending. Which areas can you cut down on? Caution: Do not completely eliminate areas such as entertainment, as the idea is to live life within your means, and not to turn yourself into a hermit.
5. Once you have reached a final decision on what to cut down on, re-assign new amounts to your categories.
6. For the next month, try to spend only what you have assigned yourself for each category.  If you are an African woman in the diaspora, it helps to carry cash rather than use a visa debit card as it makes you more aware of your spending. Another trick is to carry only a specific amount of cash on your person when going out with friends. That way, there is no way you will overspend as you simply do not have the money.
7. In the third month, re-evaluate your budget and make adjustments to how much you can spend on each category based on your experience from the previous month. Do not make adjustments to your budget simply because you do not have self-control - that defeats the whole purpose.
8. Once you have your final budget, this is what you should follow, until you get a salary increase, etc. that will allow you to re-evaluate.

Put your mask on first

Africans have many obligations regardless of whether or not we are married and have children of our own.  There is always a younger cousin somewhere who needs help with pocket money for school, or a little sister who could use a new book bag, and aging parents for whom it is expected to give a little something every month as proof of our gratitude for all they have sacrificed in educating us.  But as is said on every flight before take-off, you must put your oxygen mask on first before helping others.

As young African women, we are not required to take control of our financial futures. Of course these days we are encouraged, even pushed, to go to school and pursue advanced degrees, but apart from acquiring a job with a regular income, we are not expected to invest our money and watch it grow. "When you get married, your husband will take care of all of that".  I have lost track of how many times I have heard this. Contrarily, African men are encouraged, obligated even, to have some form of financial security before marriage.

I am challenging this status quo. The only guarantee in this life is death, and there are just too many "what ifs" floating around. What if you don't want to get married? What if you want to get married, but you never meet Mr. Right? What if you get a divorce? What if your husband suddenly dies? What if he loses his job or his business fails? Being suddenly strapped for cash is not the time for a crash course in finance.  Now is the time to start saving, exploring investment options, and laying the foundation for our own financial security.