As economic uncertainty continues to shape daily realities everywhere, understanding how to manage money has become an essential life skill especially for young people navigating adulthood. Experts emphasise that financial literacy isn’t a privilege reserved for economists or the wealthy. It’s not about how much money you have, it’s about understanding how to manage it wisely and make informed decisions, regardless of income level. ALSO READ: The hidden cost of peer pressure: How social trends can lead to financial ruin “Financial knowledge is a life skill, and when ignored, the consequences can affect anyone, regardless of income. That’s why building healthy money habits early on is one of the smartest investments you can make in yourself,” said Patrick Mugenzi, a Senior Economist at the National Bank of Rwanda. Whether you earn little or a lot, here are key money lessons that can help build financial security: 1. Invest in something Mugenzi, emphasized that anyone aiming to improve their financial situation should consider exploring a range of investment options beyond traditional savings. ALSO READ: Teaching financial literacy to young minds: A look at 2nd Money Makeover Challenge “Investing creates the opportunity to grow your wealth. Over time, investments compound interests meaning you earn returns not only on your initial capital, but also on the profits it has already generated.” He said that investment opportunities fall into two main categories of physical assets like land and property, and liquid assets such as treasury bills, bonds, and stock market investments. “Many people think investing requires millions, but with as little as RWF 50,000, you can begin your investment journey through treasury bills. Physical assets, including land and houses, are popular for long-term stability, but they take time to sell,” he said. In contrast, liquid investments like government-issued treasury bills and bonds offer steady returns and flexibility. Treasury bills, for example, can offer interest rates of 10 to 12% and are redeemable in less than 24 hours if needed, even the National Bank of Rwanda can buy them back if no buyer is found on the secondary market, said Mugenzi. ALSO READ: Financial literacy among children and youth crucial “The stock market offers additional opportunities, but with higher risk. If the company performs poorly, investors could lose money. That’s why beginners are often advised to start with low-risk government securities, which still offer a hedge against inflation.” 2. Start saving early and consistently Saving is one of the most fundamental habits for building financial security, and according to Mugenzi, the sooner you start, the better. “The misconception that saving requires large amounts of money is misleading. Instead, discipline and consistency are key. You don’t need to wait until you’re earning a big salary to begin saving, start with whatever amount you can and be consistent,” he said. “Saving helps you prepare for emergencies, invest in future opportunities, and avoid unnecessary debt. It also instils discipline, encouraging you to distinguish between wants and needs. Whether you’re putting money aside for school fees, business capital, or retirement, developing a savings culture is a powerful step toward financial independence.” Even small, regular deposits can grow significantly over time, especially when saved in interest-earning accounts or investment vehicles, he said. 3. Practice the 50-30-20 budgeting rule Referring to the well-known 50-30-20 budgeting rule where 50% of income goes to needs, 30% to wants, and 20% to savings and debt repayment, he explains how even low earners can apply this model in a realistic way. “If you’re earning RWF 100,000 a month, it’s true that most of it will go to your basic needs like rent, food, and transport. That 30% for wants like entertainment, outings, which might not apply at all. But if you can still put aside even RWF 10,000 or 20,000 monthly, you’re already developing a saving culture,” said Mugenzi. Mugenzi pointed out that the goal is not to follow the rule perfectly, but to adopt its principle of dividing income with intention. The habit of saving something regularly helps build financial discipline. Over time, as income grows or expenses are adjusted, the model becomes easier to apply more fully. 4. Track your spending “One of the most powerful ways to improve your financial habits is by tracking your spending. This simple yet often overlooked practice helps you understand where your money goes each month and uncovers patterns that may be quietly draining your finances. Without it, it's easy to underestimate how much you spend on things like eating out, impulse purchases, or unnecessary subscriptions,” said Mugenzi. “Awareness is the first step toward change. Once you clearly see how your money is being used, you can start making intentional decisions, cutting back where needed, prioritising essentials, and aligning your spending with long-term goals.” Mugenzi noted that many people struggle financially not because they don’t earn enough, but because they lack visibility over their spending. This often leads to a cycle of living paycheck to pay check, where saving feels out of reach and investing seems impossible. “But with consistent tracking, you gain control. You can design a realistic budget, allocate funds for savings, and begin building for the future. Tracking also helps to stop wondering where your money went at the end of the month, you begin directing it with purpose from the start. Over time, this habit builds financial resilience, ensuring you're prepared for emergencies and laying a solid foundation for long-term financial stability.” 5. Build an emergency fund One of the most essential pillars of financial stability is having an emergency fund. Teddy Kaberuka, a Rwandan economist, recommends saving at least three to six months’ worth of living expenses to cushion yourself against unexpected events such as job loss, medical emergencies, or urgent repairs. “Life is unpredictable, and without an emergency fund, you’re one crisis away from financial distress. keep this money in a separate, easily accessible savings account, not in your main spending account,” he said. “This isn’t money you touch for daily needs or spontaneous purchases. It’s a financial safety net, and having it gives you peace of mind. Even saving slowly, month by month, adds up and prepares you for life’s uncertainties.” 6. Set financial goals To build a healthy financial future, Kaberuka urges people to start setting clear financial goals like short-term, medium-term, and long-term. Short-term goals could include saving for a holiday or purchasing a new gadget, while medium-term goals might involve buying a car or starting a small business. Long-term goals often include bigger ambitions like owning a home, investing in property, or planning for retirement. “Having specific goals gives your money a purpose, it helps you stay motivated and make better decisions about how you spend and save. Aligning your financial behaviour with these goals is key to making progress,” he said. He said that goals should be realistic and measurable. “It’s not enough to say ‘I want to save’, you have to define what you're saving for, how much you need, and by when. That way, every financial decision becomes more intentional.” By setting clear goals and tracking your progress, you create a roadmap that not only strengthens your financial discipline but also turns your aspirations into achievable milestones, he said. 7. Understand your income A key step toward financial stability is understanding exactly how much you earn, and how much of it you actually take home, and knowing the difference between gross income and net income. Gross income is the total amount you earn before any deductions, while your net income, often called take-home pay, is what lands in your account after taxes, pension contributions, and other deductions are removed. “Many people make the mistake of budgeting based on their gross income, only to realise too late that their actual spending power is much lower. To manage your money wisely, you need to know your full salary structure. What is your basic salary? Are there bonuses or allowances? What percentage is taken out for taxes, insurance, or other mandatory contributions?” Kaberuka asked. “Understanding your income in detail allows you to plan realistically, avoid overcommitting financially, and make better long-term decisions. It also helps you identify opportunities, such as benefits or tax exemptions, you might not be using fully,” he added.
