Personal Finance & Personal Budgeting by Salum Awadh
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PERSONAL FINANCE &BUDGETING
“Where it ALL begins”
Presented by
Salum Awadh
Business & Financial Consultant
10th August 2012
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What will be covered? What is Personal Finance?
Context of discussion
Key components of personal finance
Personal budgeting
Challenges we face in achieving better personal finance management
What needs to be done
A simple process for developing your personal financial plan
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Context
Current inflation at 17.2%Less than 20% of Tanzanians are formally
bankedInsurance penetration is less than 10%Social security/pension coverage is 3% or less
Tax evasion is unlikely (PAYE, VAT)Default is very high (credit reference bureau)Informal borrowings (highly expensive &
highly risky)
Limited understanding of investmentopportunities and how to invest (equitymarkets, debt markets, other investments)Low or lack of savingsLegal compliance and how it fails
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Personal income
• Salary (about 3million people inthe formal sector)
• Personal business(more than 2.7million ininformal sector)
• Governmentsupport “NONE”
• Terminal Benefits
Budgeting
• What you spendon
• How you spend• How you plan
Taxation
• Income tax• Withholding tax• Property tax• VAT• etc
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Personal budgeting
A financial plan indicating yourincome, expenditure, and savings
You can use simple tools suchas excel sheet, pen&paper, ipad,etc
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Simply……..
What youearn
• How much
Where youspend on
• Fixed expenses• Debt repayment• Non-basic
Futureplans
• Retirement• Acquiring assets• etc
Surplus/deficit
• How you deal with deficit
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Challenges for personal finance
planning
Limited knowledge on personalfinanceLack of enough public awareness
on personal financeLack of enough advisory servicesNot taught in schoolSome parents being wrong “role
models” Lack of personal drive to learnHigh dependence ratio (can’t
save)
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• How much you earn/you get from your benefits
• What you own• What you owe
Self-
assessment/family
• Retiring? Getting a job? Investing?• Buying a property?• Paying tuition fee?
Setting financialgoals
• How to increase your income• How to cut costs• Where to invest?• etc
Develop a personalplan
• Discipline Implement
• MonthlyM&E
Simple process of developing personal financial plan
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For your personal finance &investment advise
Salum Awadh
Email: [email protected]
www.ssc.co.tz
Mobile: +255 786 092920 / 656 006 106