PERSONAL FINANCE

STARTER KIT
MONET TIPS YOU CAN START IMPLEMENTING TODAY!

THE LEGACY HUB KE

 Table of Contents
01 Introduction

02 Top 3 Personal Finance Insights

03 The 50-30-20 Budgeting Method

04 How To Build Better Saving Habits

05 4 Investment Opportunities

How To Make Smart Money Habits

06
Stick

07 About The Legacy Hub KE

THE LEGACY HUB KE

Copyright ©, The Legacy Hub KE, 2022

All rights reserved. No parts of this eBook may be

copied, distributed, or published in any form without
permission from the The Legacy Hub KE.

For permissions contact: thelegacyhub.ke@gmail.com

Disclaimer: The information in this e-book is of a

general nature only. It does not take your specific
needs or circumstances into consideration. You should
look at your own personal situation and requirements,
and seek independent professional advice, before
making any financial decisions.
 01
INTRODUCTION

Have you ever felt overwhelmed by all the

numerous concepts that personal finance
entails? I know how intimidating it can feel, I
was there once. And how 'jargony' the
finance sector can be! (On behalf of my
jargonistic finance colleagues, I apologize.)

The sole purpose of this e-book is to take

you over personal finance insights (simple
and jargon-free) that will put you in the right
mindset for the exciting journey ahead.

But first, What is Personal Finance?

Personal finance is about managing your
money and meeting your personal finance
goals, whatever the goals are. Making sure to
pay your bills on time, saving for your dream
vacation, and working towards your
emergency funds are some things that fall
under personal finance.

Before we go any further, let me introduce

you to the top three personal finance insights
that will simplify the finance concept. (These
are insights I wish I had known right at the
beginning of my personal finance and now, I
am always eager to share with everyone
starting their finance journey.)
 02
TOP 3 PERSONAL FINANCE INSIGHTS
Budgeting is the basis of all healthy
personal finance habits.
A budget is purely an intentional spending
plan, in which you tell your money where to
go instead of wondering where it went. It
helps keep your personal finance goals on
track. Having a working budget will assist you
in preventing “spending leaks,” or spending
money without thinking. It will assist you in
ensuring that you have enough money to
make your payments on time, even if your
bills and income fluctuate monthly.

A percentage of every income you get is

yours to keep.
Regardless of how small your paycheck is, you
deserve a piece of your hard-earned cash. I
call this concept ‘paying myself first’ where I
pay into my savings and investments before
paying anything else. Believe me when I tell
you that practicing this will help you fast-
track your personal finance goals more than
anything else.

Leverage the magic that is compound

interest.
“Compound interest is the eighth wonder of
the world; he who understands it earns it; he
who doesn't, pays it.” This quote might sound
cliché and is easy to overlook. But in reality, it
is true. It has always been true. Every month,
when you pay yourself, put that money where
it earns you compound interest and with a
number of years of consistent investing, you
will concur that indeed, compound interest is
pure magic!
With budgeting as the basis of your personal 03
finance habits, how exactly then should you
go about it?

THE 50-30-20 BUDGETING METHOD

The 50-30-20 budgeting method is a rule of
thumb that ideally, should help you have a
rough structure to follow while distributing
your earnings among the different spending,
saving & investing categories.

It is one of the simplest, yet most effective

methods to plan for your money, and my
favorite thing about it, you can always tweak
the rule to fit your personal preference and
have it reflect exactly where you are at in
your journey.

Let’s suppose that you are earning KES

50,000.

The rule states then, that 50% of that (KES 25,

000) should take care of all your NEEDS
(your mandatory bills and expenses). You
might wonder, “what if my bills and expenses
require more than 50% of my income?” That’s
a clear indication that you are living above
your means, and you should either downgrade
your lifestyle or increase your sources of
income.
 04
Next, 30% of your monthly income should
take care of your WANTS. The ‘wants’
category includes items like entertainment,
eating out, buying birthday gifts, and all that
good stuff! The soft life! And this is what I
love about this rule. It doesn't insinuate, at
any point, that budgeting is boring or that it
means you cannot enjoy your hard-earned
money by having some fun with it. Quite the
opposite. It encourages you to budget for
your fun and allows you to allocate your
income to all the areas of life that matter to
you most.

And the remaining 20% of your monthly

income goes to your savings and
INVESTMENTS. This is your get-ahead
category; the category that acts as your
financial cushion and allows you to grow your
money.

PRO TIP

You should use the 50-30-20 budgeting rule

as a guideline, as spending percentages you
should not go above.
But by all means, feel free to tweak the
NEEDS, WANTS, and INVESTMENT
categories depending on your current
financial goals.

For instance, if your current goal is building

wealth through savings and investments,
then you can allocate 30% to investments and
use the 20% for your wants. This of course is
feasible as long as it’s sustainable.
 05
Now that a percentage of every income you
get is yours to keep, here's how can you build
and sustain a saving culture.

HOW TO BUILD BETTER SAVING HABITS

1. Always pay yourself first
You are less likely to stick to your savings
plan if you wait to see what money is left over
after paying bills. Determine how much
money you intend to deposit into your
savings each month in advance. And if you get
a raise or finish paying debts, increase the
amount of money you put into your savings
accordingly.

2. Start budgeting right away

The first step to a better saving habit is to
create a reasonable list of monthly
expenses - what you must spend each
month. Typically, this includes rent,
transportation, utility bills such as
electricity and water, and telephone bills,
among other things.

Budgeting will allow you to track your

expenditure and take note of your
spending habits, cutting back on
unnecessary spending and redirecting the
cash to your financial goals.
 06
3. Watch your mindset about money
When it comes to improving your personal
finances, having a proper money mindset is
essential. For instance, what is your attitude
towards debt? If you had an access to a loan,
would you view the loan as an asset or a
liability? How about windfall money? Is it for
splurging? What’s your attitude towards
budgeting? Is it only when you are short in
cash?

Analyzing your money mindset will help you

know the aspects of personal finance habits
that you should work to improve.

4. When possible, set up automatic

transfers
Setting up automatic transfers from your
current account to your savings account
can help you start saving money without
thinking about it too much—as long as you
have a budget in place and understand
your costs and savings objectives.

Simply create as many savings accounts as

you need for your various financial goals,
and then set up automatic monthly
transfers from your checking account to
your savings. This way, the burden of the
monthly decision is off your shoulder.

Learn more about the Saving Culture in this

YouTube video
But saving alone will not take you to where
you want to reach financially. To build 07
wealth you have to invest and leverage the
power of compound interest.

4 INVESTMENT OPPORTUNITIES YOU CAN

START WITH AS LOW AS KES 5000
1. Money Market Funds (MMF)
MMFs are one of my favorite investments.
With MMFs, you get to kill two birds with one
stone. First, you will be saving since they
provide capital preservation and second, you
can invest since you’ll get some interest on
your money (interest rates fluctuate between
7%-10% pa). MMF’s low-risk makes them a
good choice for beginner investors or if you
don’t want to spend restless nights worrying
about losing your money. They are quite
excellent to use for goal-based savings like
putting money aside for your emergency
fund, travel, or your children's fund.

2. Personal Pension Funds

Ever noticed how there is a loan for pretty
much anything, other than retirement? Trust
me, you don't want to grind so hard your
entire adult life only to grow old and poor,
because you never thought about what will
happen to you once you are no longer
employable or pensionable. And believe me,
that happens a lot! I always recommend that
as soon as you start earning money, you
should begin saving for retirement. The
sooner you begin, the more years your money
will have to compound and grow. Personal
Pension Funds guarantee capital preservation
and most of them require only KES. 1,000 to
set up.
 08
3. Balanced Funds
If your risk appetite ranges from moderate to
high, then Balanced Funds could be a
collective investment to look into. Balanced
Funds are a form of hybrid investment that is
distinguished by their diversification over two
or more asset types, from Treasury Bills and
Bonds to Corporate Debts and Equities. Most
insurance and investment companies that
have Unit Trust products have this investment
option available for as little as KES 5,000.

4. Equity Funds
Under Equity Funds, the fund manager will
invest your money in the stock market
(equities). But you don't get to decide which
shares to buy or which ones to sell. Instead,
the Funds Manager pools the unitholders’
money and invests in the best-performing
stocks. Equity Funds are good investment
vehicles for investors who aren’t so
knowledgeable about stock market investing
but are eager to penetrate the market.

Learn more about the Investments you can

make with KES 5,000 in this YouTube video

You can also take our INVEST FOR YOUR

BEST LIFE MASTERCLASS to fast-track
your investment journey.
 09

PRO TIP

Before committing your hard-earned cash to

any investment, you must do your research
on investment products and ask these due
diligence questions:

1. Where is my money being invested & what

is the underlying asset?
2. What is the risk & return of this
investment?
3. How can I best leverage this investment?
4. Are there any extra charges to opening this
investment account?

You also have to research on:

1. The institution offering the product.
2. Their reputation.
3. How long they have been in the industry
4. How they compare with other institutions?

We cannot overemphasize the importance of

due diligence!
Bad money habits can leave you in debt and
struggling. Good money habits can help you 10
grow wealth and live a financially
comfortable life.

HOW TO MAKE SMART MONEY HABITS

STICK
1. Use an App to track your daily spending.

Under building better saving habits we stated

that tracking your spending is the first step in
getting your finances in order.

But this is easier said than done, especially if

you have to wait until the end of the day to
note down the day's spending. Here's where
some amazing expense tracker apps come in
handy. With such an app, you can easily log
your spending in real-time. (I would personally
recommend Money Manager App from Play
Store)

1. Set a monthly Finance date with yourself

The habit of taking myself on finance dates has

been a game changer for me. Here is where
you review your budget tracker, evaluate your
financial progress, and set your financial goals
for the upcoming month.

The date doesn't have to be something fancy

(although it helps to make an occasion out of it
as a reward for sticking to your budget).
 11

3. Get a Personal Finance coach

If you don't want to go the 'trial and error'

route in attaining your financial goals, then
you should get a personal Finance coach like
myself.

A Personal Finance coach will provide you

with money management strategies,
specialized for your income level, so you can
make wise finance decisions.

4. Set up reminders.

At the beginning of a new habit, it is easy to

forget. Creating reminders on your phone or,
computer to check in on your habits is a good
way to build consistency.

To help you remember habits and reward

yourself for taking action, try making a daily
tick box. The more conscious you are of the
habit, the more you will do it and the more
likely it will stick.
 About Us

The Legacy Hub is your one-stop platform for all

things personal finance, business coaching, and
personal development. We provide you with the
training, accountability, and support that you
need to take control of your life.

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