WHERE DOES ALL MY

MONEY GO-PART 2

A DISCUSSION ON
FINANCIAL
MANAGEMENT
ADEBAYO AJAYI “SUCCESSBAYO”
“THE ONLY EXERCISE SOME PEOPLE
EVER DO IS RUNNING... OUT OF
MONEY! "
“IT’S NOT WHAT A MAN EARNS THAT
MAKES HIM RICH BUT WHAT HE HAS
LEFT AFTER SPENDING”
 WHERE DOES ALL MY MONEY GO
PART 1-RECAP

1. There should always be a purpose for Savings.

2. Have a formula for spending (e.g. 50%-Needs, 30%-Wants and 20% Savings).
3. Your accommodation should not exceed 20% of your yearly income.
4. Always celebrate financial milestone.
5. Have 3-6 months emergency fund in your account after one year of work.
6. The greatest form of keeping money is Investment.
7. The Golden rule of finance is TO ALWAYS SPEND LESS THAN YOU EARN.
WHERE DOES ALL
MY MONEY GO
PART 2
CONTENTS OF Financial Security
PRESENTATION
Financial Planning

Benefits of building wealth

Managing Finances in tough times

 WHAT IS FINANCIAL SECURITY?

Financial security is the ability of

households to manage the ongoing
economic needs and prepare for
the future.
DYNAMICS OF FINANCIAL
SECURITY
These are the normal wants
and needs that occur in the
future

These are the

unforeseen
expenditures that we
seldom experience
e.g. COVID-19
Impact
IS BORROWING A GOOD OR BAD
THING?
BORROWING IS THE ACT OF
TAKING MONEY FROM THE
FUTURE AND SPENDING IT TODAY!
FINANCIAL
PLANNING
 WHAT IS A FINANCIAL PLAN?

A financial plan is a current picture of your current

finances, your financial goals and strategies you’ve set to
achieve those goals.
 FINANCIAL PLANNING PROCESS

1 • Know where you stand

2 • Set your goals
3 • Plan for the future
4 • Manage your Money
5 • Review your Plan
 1. KNOW WHERE YOU
STAND
▪ Take an inventory of all of your debt, income and expenses.
▪ Make a list of your take home income from all sources.
▪ Evaluate all of your expenses, including all your monthly needs and
wants.
▪ Comparing your income and expenses provides an insight into
where your money is going.

Once you understand your current financial situation, you can plan for where you
want to be.
2. SET YOUR GOALS

• Your financial goals should be unique to your financial

situation and reflective of where you want to be in the future.
• Set both long-term and short-term goals.
• The next step is to determine the importance and priority of
each of your financial goals
• Finally, think about how much money is required to achieve
each goal.

Look for areas where you can decrease expenses in order to work toward your financial
goals. Bringing in additional income will also allow you to achieve your financial goals sooner.
3. PLAN FOR THE FUTURE

This means, for each of your financial goals, think about what it will take for you to achieve that
goal.
Some of the strategies for this includes;
1. Check for spending leaks (eliminate wastages, reduce wants, reduce luxury shopping, reduce
eating out etc.)
2. Look for a higher paying jobs
3. Have additional source of income
4. Have a target savings and diversify investments.
 SAVINGS

Savings is the act of putting

out money that can be
spent today and keeping it
for the future.
 SCENARIO 1-SAVINGS

Question
Nelson earns #80,000 in a month and he decides to
save 20% of his income every month.
In 5 years time, how much would Nelson have saved?
 SCENARIO 1-SAVINGS

Solution
Per month savings=#80,000* 20%= #16,000
1 year savings=#16,000*12= #192,000
5 years savings= #192,000*5= #960,000
 INVESTING

This is the act of letting money grow

and build, at a rate greater than
inflation.

Investment mostly applies the law of

compound interest to allow money
grow at an exponential rate relative to
time.
FUTURE VALUE OF MONEY
 SCENARIO I1-FUTURE VALUE

Question
If Nelson invest #960,000 for 5years with 5% interest
rate.
In 5 years time, what will Nelson investment be worth?
 SCENARIO I1-FUTURE VALUE

Solution
FV = PV (1 + r)n
PV = #960,000
r =5%=0.05
n= 5 years
FV = PV (1 + r)n
FV=960,000(1+0.05)5

FV=#1,225,230
 4. MANAGE YOUR MONEY

• Always have a budget before spending

• Track your expenses daily, weekly, monthly and yearly
• Always spend less than you earn
• Cancel memberships you never really use
• Avoid emotion-based decisions

Don't forget to enjoy today even though you are preparing

for tomorrow.
 5. REVIEW YOUR PLAN

• Your financial plan should be a living document.

• Take time to regularly view your savings and

investments .

• Additionally, reviews of your financial plan should take

place when major life changes, such as marriage,
having children or changing jobs, occur.
 BENEFITS OF BUILDING WEALTH

1. Helps to have a Smooth Consumption.

2. Helps to meet Personal financial goal.
3. Helps to have something for rainy days (Emergency days)
4. Helps to start your financial wealth accumulation early.
 MANAGING FINANCES DURING
TOUGH TIMES

1. Accept your financial situation and focus on what you can control
2. Seek alternative source of income. E.g. Area of giftings, Accessible opportunities etc.
3. Control your spending and decide on which bills to pay first.
4. Avoid flexible needs and wants, only focus on Essential needs.
5. Make the most of existing resources
6. Stay focus on God by Meditation and Prayer to increase your Inner strength