I grew up in a very interesting home. My mum was a high school teacher and my father was a university lecturer. At my home, there was a silent and unwritten rule on how my parents spent their hard-earned money. My mother was tasked with ‘taking care of the house’, ensuring that the house ‘lacked nothing’ in terms of shopping. She was also in charge of paying for our school fees at the primary school level as well as giving us ‘pocket money.’ My father, on the other hand, was in charge of ‘big projects’, buying and developing plots, and paying for our fees in high school and university. Above all, all investment projects were done by my father with all of them registered under his name.
In most rural areas in Kenya, it is the work of the ‘man of the house’ to invest in ‘big projects’ and the sole duty of the ‘lady of the house’ to take care of the house. Things are however changing. With the evolution in education, the technological changes sweeping across the world as well as enlightenment and cultural changes from other parts of the world, the debate of who should invest and who should not in a family is slowly being done away with. There are various ways that a couple can work together to ensure that they channel their funds towards a common goal that will better both them and their families. Here is a good place to start – Planning for the future: How to Create a Financial Plan
First, you need to learn how to save as a family. Saving is a necessity and it should not be an option. Regardless of how much you or your spouse is earning, saving part of your income, no matter what it is, is the first step toward family financial investment. Saving as a family has many advantages. The main one is that you will always have a common pool to fall back to in case something happens with your main source of income. You will also be taking care of the future and that includes your children. Before you start saving as a family, sit down and agree on how much you are going to contribute towards your savings. You can decide to start by saving 10 per cent of your monthly income. 7 Common Financial Mistakes & How To Avoid Them
Contrary to what many people think, saving needs a plan and strategy. For instance, know what you are saving for. You cannot just decide to save for the sake of accumulating money. Have a goal of what you are saving for, your target saving and when you plan to hit the target. If possible, sit together and draw a plan and how much you will be contributing, for how long and for what purpose. Saving or investing, which way to go?
Second, the best way to start investing together as a family is to have an agreement. Draft a binding contract that will outline the terms and conditions of investing. Do not just invest on grounds of trust. Trust is key but you need to remember that trust can be built in 30 years and only take three minutes to break. Even if you are in a ‘stable’ relationship, have a contract drawn and if possible, involve a family lawyer. It helps a lot to have things in writing. In the contract, state clearly what will happen in the event that you will want to go on separate ways and whether you will want to continue investing together or quit altogether.
Areas to invest in as a family
There are various areas that a couple can invest in depending on the kind of income they have. Some of the areas include:
Property development – if you have a good income, you can start saving towards investing in property development. This includes venturing into the real estate sector. The best way to have good returns in this sector is to buy a piece of land at a strategic place, and construct either business premises or houses to rent out. You can also construct houses and then sell them.
Business – Business is a collective term. Discover what you can do in the business world. If you are good at doing retail business, you can start thinking of starting a retail shop or even a family supermarket. With proper planning and with skilled people you can trust, you can make good returns.
There are different sectors you can invest in as a couple. This includes the transport sector, farming, hospitality, housing etc. It is best to start in a sector which you understand so that you are not struggling to run a business you don’t understand.