Financial challenges are heavy on the youth and a major cause being indiscipline and a lack of financial management undertaking
Dar es Salaam. Youth is a stage of life when a person is expected to build the foundation of a bright future through hard work and smart saving of money in order to start accumulating wealth.
That’s because it’s a time when someone is strong and fit enough to perform different duties and tasks.
Basically, any person aged between 18 and 35 years is considered to be in this life category in Tanzania.
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It is in this age category when a person is expected to know where to get money, how to get it and make proper expenditure in order to make life better.
However, most of the youth struggle with financial indiscipline, resulting in a stressful life and challenging adulthood.
Mr Salim Salim, 24, a bodaboda rider in Mabibo, Dar es Salaam says he spends money depending on the way he gets, explaining that the more he gets money, the more he spends.
“I don’t think there is a need to focus much on tomorrow than today, because I’m not even sure if I’ll be alive tomorrow,” he says.
“I will spend all the Sh20,000 I collected today in order to remind myself of the need to look for more money the following day,” he adds.
Mr Salim says he used to save money three years back, something that made him lazy enough to abandon work for even a week simply because he had money for food and other basic needs.
Ms Annastazia James, 21, is a university student who says she is very careful and disciplined in her expenditures because being a student, she doesn’t have the guarantee of getting the money in the next few days.
“To be honest, I’m scared of going broke. So I think twice whenever I want to spend my money. I would make thorough considerations whether to purchase what I intended to buy or not,” she says.
She explains that she spends her funds on books and stationeries, food, and basic needs only and that she abstains from luxurious and unneccesary use of money.
“I spend my funds that way because that’s all I can afford. There is no need to spend my funds to purchase things that I know I can’t afford,” she says.
However, Mr Idrissa Haroun, 63, a parent to four children says that both parents and the youth share the spoils as far as the challenge is concerned.
According to him, most parents don’t groom their children to have financial discipline by making proper utilisation of funds, however, they blame them for indiscipline.
“It’s like we just want the best results without making the much-needed investment in our children, including showing them the way to success,” he explains.
Furthermore, he says the youth are also irresponsible to themselves in that they should use their education to tackle different challenges including poor management of funds.
“Parents may have ignorance of financial discipline, but having acquired an education, the youth are supposed to make a revolution in that area by bringing in the knowledge of proper management of funds to parents and siblings,” he says.
Causes poor funds management
Mr Hussein Hassan, a financial consultant says the majority of the youth are financially illiterate, relying on parents and guardians to make sound financial decisions on their behalf.
“They are unaware of the complexities of those decisions,” he adds.
Mr Joseph Manyeri, a financial consultant says how to raise money, difference in the needs, sources of income, and how to make savings and investment was a subject the youth lack from parents, schools and guardians during upbringing.
“As a result, once they leave the nest, they are overwhelmed with complex financial decisions. Some tend to fall into the trap of debts, therefore sinking in the area of development every day,” he says.
“Others find themselves in vicious cycles repeating the same financial mistakes every year,” he adds.
What should be done?
Ms Lois Metili, an independent trainer on issues of entrepreneurship, marketing, communication and life skills, says the youth need to establish their monthly basic needs.
“Basic means basic. It includes electricity and water bills, rent, food as well as transport fare to and from workplaces,” she says.
She suggests that in today’s generation, it may be important to set a price ceiling on airtime as well.
“They will need to establish the main source of income and the frequency of getting the money that could be sourced from salaries as well as ‘gigs’ and their adequacy in meeting their basic needs,” she says.
Furthermore, she says in most cases there is a disparity, with the former outweighing the latter, noting however that there is a need to establish other sources of funds in order to top-up.
“It’s important to remember that taking a loan cannot be considered as a source of income,” she stresses, adding that that is just an advance that will be repaid with interest.
Mr Manyeri says the youth need to think about how and the amount to save. “Many think that saving is done after use. But, actually, saving should be done before using whatever has been garnered.”
However, he says to overcome these mistakes, it is important to sit down, make and implement a sound financial plan.
He says that sound investment includes capitalising in ventures that are regulated as well as in fixed accounts that are regulated by the Bank of Tanzania (BoT).
They include government bonds, shares and other similar schemes, noting that in order to reach such successes, the youth should reduce luxurious expenditures.
“Instead of buying new things all the time, they may opt for used clothes, shoes, bags, books, furniture, and many others that are still in good condition in order to save money,” he describes.
Also, he says repairing things that are cheaper was a wiser decision than replacing them with the new ones.
Furthermore, he suggests that the youth should learn to change the use of things that are not repairable.
“A broken bucket could become a flower pot, a used towel can become a mop, and an empty jar could be used as a container for sugar/salt. You just need to be creative,” he says.
Moreover, he says, cost cutting was one of the best ways of proper management of funds.
“Instead of taking a bottle of soda every day that could make a huge amount after a week, one could go for a bottle of water every day and refill the bottle at home,” he says.
Instead of a taxi, he suggests that one could go for a bus, suggesting that the focus should be on cost-cutting that will definitely make the difference.
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