“Plan Your Money, Plant Your Future: Understanding the Importance of Financial Literacy”

Financial literacy is a concept that many are familiar with, yet few truly understand. At its very heart, financial literacy involves grasping financial ideas and using them to make informed decisions about investments, savings and debt management.

At Octagon Financial Services Limited Zambia, we believe that financial literacy is crucial for developing wealth responsibly, managing debt, and planning for a secure future.

It is an ongoing learning process that can help individuals achieve their financial goals, manage financial risk, and make informed decisions about a variety of financial products and services. Unfortunately, the number of people who struggle with financial difficulties remains alarmingly high.

In Zambia, for instance, research shows that an astonishing 78 percent of the population live pay cheque to pay cheque, with little to no savings to cover emergencies. This lack of financial knowledge and awareness can have devastating consequences, including insolvency and poor planning for retirement.

As we join the rest of the country in celebrating this year’s Financial Literacy Week which runs from Monday, 20 March 2023 to Sunday, 26 March 2023 under the theme: “Plan Your Money, Plant Your Future,” we remain steadfastly committed to educating Zambians about the benefits of financial literacy and how financial independence can be achieved through informed decision-making.

With better financial literacy, individuals can start to exercise better control over their spending and make informed judgments about their finances.

This involves developing self-control, discipline, and financial understanding about how and when to save, as well as where to invest. With a solid foundation in money management, individuals can set up budgets, track their spending, and see the value of saving money for the future.

Financial literacy further teaches individuals how to safely and appropriately utilise credit facilities. It places emphasis on spending within one’s means and paying debt on time.

Moreover, being financially literate also means being prepared for unforeseen circumstances, such as the COVID-19 pandemic. During this difficult time, many people relied on their savings to get by. Recognising the significance of saving money is crucial to being prepared for any future eventuality.

As the world celebrates Global Money Week 2023, financial awareness is more crucial than ever for determining one’s future financial comfort as the cost of living continues to rise around the world.

While accumulating savings is an important tool in one’s financial toolkit, savings alone cannot provide financial security. To provide for one’s needs post-retirement, investment in proper pension management vehicles and institutions is fundamental.

In addition, post-retirement planning requires setting solid financial objectives, making sound decisions about spending, and aggressively tracking one’s expenses while still being in one’s prime earning years.

As an award-winning regional financial services provider with significant industry consolidation within the non-profit, public and private sector, we aim to provide guaranteed financial security that helps individuals prepare for unforeseen circumstances and meet their future aspirations by emphasising financial planning, saving, and investing.

By starting to make better decisions about money early enough, we can all plant the seeds for a financially secure future for generations to come.

The author is Octagon Financial Services Limited Zambia Managing Director