Risk versus Uncertainty

#goodplanning #idealbusinessplanning

Most of us have those business ideas or projects to increase our streams of income. We need to weigh the risk and uncertainties which can come up with starting that business or project.

As an entrepreneur it is always best to assess the risk and be aware of uncertain scenarios which might affect your line of business.

So what is the difference between Risk and Uncertainty?

Risk is the predicted chance of an outcome in the future and is also quantifiable whereas uncertainty cannot be predicted and is not quantifiable.

I will discuss a few types of risk and uncertainty which entrepreneurs might face:


·         Employees – when starting a business you might hire employees to assist in achieving your goals. There is no guarantee that these employees can stay with you for longer so you have to factor in what to do if they resign without notice, how you continue with your business without affecting your customers. Besides leaving they might decide to have a strike which means this is going to cost the business, right? Hence it’s wise to assess beforehand.

·          Health and safety – this depends with the line of business one is. But we need to consider things like breakdowns on major machines, fire etc. and put measures to minimize it.

·         Cyber security – in this digital world we now living in, there is high risk that you can be hacked or website can crush.


·         Recession or Booms – we are not sure how the economy might be in the near future that is, is it going to continue in a recession or they might be a boom?

·         Exchange rates – this always fluctuates every day and we do not know if the rate will be stable for a while or not

·         Competition – when starting a business we do not know how the competitors are doing, are they going to innovate a new product or what. We won’t know.

So how can we minimize the risk when starting a business?

I will share a few tips below:

1)      Business plan – Before starting that project put the ideas down on a piece of paper. Draft a business plan this way you will understand what it entails and can allow being proactive if they are any changes.

2)      Market Research – Researching is always a good way in making sure the business will be a success. Do your 4P’s in marketing mix and understand them.

3)      Training staff – train your employees so that they can meet the expectations and the goals of your business.

With Uncertainty we will not know until it happens then we can assess the risk and have control measures. But just knowing and factoring it as part of the business plan is ideal.

Entrepreneurs are great at dealing with uncertainty and also very good at minimizing risk. That’s the classic great entrepreneur.” Mohnish Pabra

                                                                    Author: Talent T Manyonga                                                                 

The Savings Habit

What are savings?

Savings are the money one decides to put aside after they receive their paycheck or income from the side hustle. Think of the income and think of how much you can put away every month as well as how much you can have after 5 years if you are consistent.

What is the savings habit?

This is when you start putting aside a percentage of your income between 5-15% every month aside for your savings. It can be just any amount you feel you can afford. The important thing is to start so you can be able to cultivate the habit. Save the cents and then the dollars will generate themselves, also do not despise small beginnings.

Why do we do savings in the first place?

This money you put aside will be useful when you:

·          Have an emergency or you have an unexpected circumstance.

·          Start investing or a side hustle

·         Retire or when retrenched

·        Save for your children university fees.

How to save effectively

This is a debatable topic as people have different preferences and it’s not a one size fit all but l will share on what has been working for me:

·         Doing stokvels – for this to work set goals on why you joining that stokvel group. What are your intentions on using the money after the end of the stokvel? If you can’t answer this, you will not see the benefit of saving.

·         Having a fixed deposit account – this you can set up with your bank. Before you open one just go around comparing the interest rates. l mainly prefer the money markets accounts as they have higher interest compared to the normal savings account.

·         Saving a few dollars really does help – l do not buy any lunch at work. I prepare my breakfast and lunch at home. I save R50 every day and multiplying that by 20 days that is R1000 I would have saved and by the year end it would be R12000.

When living from paycheck to paycheck there are few new habits one has to be committed to, like:

1)      Payoff debt – pay off your high interest debts first and then the low interest debts, every month put a minimum payment of the debts. Once debts are cleared try not to borrow again and to no longer make use of credit cards, rather take advantage of the rewards cards.

2)      Look for other channels to increase your income, any small business idea even if it gives you little profit. That will help in starting a savings journey.

Let’s plan for our future and work towards financial freedom for the generations to come. It starts with you and today is the best day to start.


                                                                             Author: Talent T Manyonga

Requirements of a realistic budget


The past two weeks I shared on budget setting and budget stress testing. Those are major requirements in having a realistic budget.

Below will be sharing about other qualitative factors to consider in ensuring that the budget is realistic.

·         Once you have figured you have a positive cash flow make it a habit to put 10 or 20% of your income before deductions to savings. Also, you have to set aside 5 or 15% for emergency fund, this is for that unexpected car repair etc.

·          If you have a negative cashflow, you need to do some spending cut off and make repaying debt goals. Try to stick to the basics remember this is just for a short while so that you can free some funds. Payoff those debts, you can start by clearing off the small debt and going up.

·         Track your spending habit. Personal exercise l am currently doing. Keep all your receipts of whatever spend you are doing. Month-end take note of those receipts and factor them on the budget. Do a cost benefit analysis to have a clear picture if that spend was justified or it was one of those impulse buying. The idea here is we want to instill discipline that we stick to the budget and avoid impulse buying or spending.

·         Be realistic and committed to your budget so that you can be able to achieve those financial goals.

Its OK to break the budget once in a while but don’t make it become a habit.

                                                                                            Author: Talent T Manyonga

Budget stress testing

What is Budget Stress Testing (BTS)

 Stress testing a budget involves a more substantial examination of how a budget would cope under pressure due to changes. That is, it examines how a budget would perform under severe or unexpected pressures.

Examples of stress testing on budgets

It’s good when we plan our annual budgets to do a stress test.

Example 1

With spouses, that’s if you do joint budgets. Try to have one month without one spouses income incorporated in the budget and see if you will be able to manage through the month. You can also try to do this practically put the income of another spouse in a separate account and go through one month with one spouses income and see if you will manage. If you don’t manage think of possible options you will use to go through the month. Will you go to borrow from a friend, take a loan or use that credit card which you have planned not to use, or delay to do that project you wanted to start on and use up your savings?

Example 2

 For people who are renting out mortgage properties, on your budget stress test analysis you can put a scenario whereby all your tenants leave without giving you a notice which means that month you won’t have rental income. Will you be able to pay your monthly bond from your income? You have to question yourself.

There are different scenarios you can apply the budget stress testing even in your side hustle projects it’s applicable.

Why must we practice a budget stress test?

·         BST allows risk to be quantified

·         One is able to plan for a rainy day or a storm phase

·         Considering to practice the BST will allow one to be able to react quickly and effectively on stresses placed on the budget.

·         This proactive action is much better than being reactive to changes.

Sure, you can handle stress, but can your budget?

Let’s make our 2020 budget stress free.

                                                                                             Author:Talent T. Manyonga

The Ja-no-worry mentality

Turn your Janu-worry to Ja-no-worry

Growing up, l have heard almost every person complaining about January disease and wondered what kind of a disease it is which repeatedly struck people in the same month every year.

As l grew older l got to understand that it’s a financial indiscipline disease.

Photo from twitter

The name has just changed from January disease to Janu-worry.

What puzzles me is why we continue to have the same issues every year in January and yet we all know that month is coming.

So today l want to talk about it so that we leave behind the janu-worry mentality and stick to the ja-no-worry.

Let’s shift our perspective and look at the bigger picture. January is just the same as any other month of the year. Yes l am hearing questions like but we had spent all the money kedezember.

That’s the point number one l will address.

Many people from where l live get their January salaries way earlier in December. If we understand that this income comes in December but it’s actually not for that month but for January we won’t have the Janu-worry issues.

Here are tips on how to move away from the Janu-worry stresses:

1) When the income comes earlier. Do your January budget and do all your expenses whilst you still at it. Thus paying school fees, buying uniforms, buying groceries etc

2) If you have debit orders make arrangements with your bank for them to deduct the money earlier

3) Put aside your savings and a little for a rainy Ja-no-worry day

4) If you still have any extra then you can plan about your kedezember spending

This way it ensures that you will not start your new year by borrowing. The problem with debt is that once you start with it you will find yourself trapped in it for the rest of the year and the Januworry will continue in a vicious circle.

Let this decade be a decade we take charge of our finances and live a stress debt free life.

Author Talent T Manyonga


What is a budget?

Photo by canstockphoto.com

It is a financial plan that allocates income towards expenses, savings and debt. Budgeting is a way of foregoing instant gratification and sacrificing for the future. It’s a control check to make sure you know where your spending goes rather than wondering where the money went.

What you need to do before starting with the budget:

Track how much you are earning that is all you streams of income e.g salary, side hustle income etc

If your income is more than your expenses you have a positive cash flow, with this extra income you have to plan on saving or investing it. If your expenses are more than your income it’s a negative cash flow. In this case you have to figure out what need to be cut down on the expenses. Discipline here plays are vital role try to live within your means.

Make a list of all your expenses.

Recommendation; go back to several months before and track your expenses either on your bank       statement or check how you have been spending. List down everything. 

 Stick to the budget.

It will not make logical sense to write down a budget which you will not follow. As you write it down make a commitment to follow and stick to it. Do not spend on what you have not listed as an expense for that month or year. Even if you get it on a special or bargain.

Why is it important to do a budget?

Photo by canstockphoto.com

1. It helps in avoiding spending in areas which are not a necessity which are cutting in your financial goal.

2.  It will give a clear indication of where your money is going and helps in planning the future.

3. It ensures that you will always have enough money for the things you need and which are important to you.

4. It will keep you out of debt or help you work your way out of debt if you are currently in debt.

Learn to manage the little money you get to attract more money.

2020 may it be a year to take ownership and responsibility of our finances, it starts with you as an individual.

                                                                                            Author: Talent T Manyonga

Financial Literacy

Good day, hope l find you all well. Today will talk about financial literacy

What is Financial Literacy?

Is the ability to use knowledge and skills to make effective and informed money management decisions. It is the basic understanding of how money works, creating and achieving financial goals and managing internal and external financial challenges.

How to create financial goals:

·         When you get the money make a budget of how you intend to use the money and always try to stick to the budget

·         Limit debt – Avoid overspending and impulse buying try to live within your means

·         Use wisely your credit cards or overdraft facilities

·         Monitor your credit scoring

·         Don’t borrow to cover another debt, rather cut on other wants and only stick to the needs

·         Create an emergency savings account

·         Learn to plan and save for retirement

·         Understand the investments you choose for your money

Habits to boost your Financial Literacy

1)      Read about personal finance e.g. books like Rich dad, poor dad by Robert Kiyosaki

Pick up one or two subjects which align with your goals, whether it’s budgeting, savings or debt repayment

2)      Track your spending

This is a wake-up call to most. Try to track your spending for a month or two. This habit takes a little leg work but it will be a good indication to show you where money is going.

3)      Invest in yourself

Personal development is always the best achievement. You have that business idea but do not know where to start. Taking a course towards that will help you embark on your business and minimizes the chances of failing.

4)      Focus on what you can control

Sometimes life seems unmanageable and unpredictable. Even if you have all the knowledge about finance, they are some things we can’t control. So rather than wasting our energy on what we can’t control, lets focus on the things we have control over.

5)      Track your net worth

If you focus only on your income, it’s easy to think you are getting rich. Whilst you forgetting your expenses. Net worth is your income subtracting all your expenses and your Asset less Liabilities.

“Financial literacy is just as important in life as other basics” – John W Rogers

                                                                                                                         Author: Talent T Manyonga