The Tony Steuer Podcast with Sheila Mmboga: The Importance of Financial Wellness

“Always have a budget and an emergency fund. Having an emergency fund will cushion you against unforeseen issues that may arise.” - Sheila Mmboga. 

In this episode, I spoke with Sheila Mmboga, founder of the Financial Wellness Centre about the importance of financial wellness.  We also discussed trends in financial literacy education along with what’s unique about finance in the United Arab Emirates and what are common financial issues across the globe. 

Bio: Sheila Mmboga is a financial literacy advocate, Economist,  Entrepreneurship Consultant, and founder of The Financial Wellness Centre in the United Arab Emirates. Sheila is also the host of Financial Wellness with Sheila Mmboga. Her exemplary work in financial and business consultancy has resulted to her being featured on various local and international business platforms. 

Transcript

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Speaker 1 0:07

Welcome to The Tony Steuer Podcast, presented by Paperwork. Be prepared for life .

Speaker 2 0:18

Welcome. I'm pleased to be joined today by Sheila Mmboga. Sheila is a financial literacy advocate, economist, entrepreneurship consultant, and founder of the Financial Wellness Centre in the United Arab Emirates. Sheila is also the host of The Financial Wellness With Sheila Mmboga Show. Sheila, welcome. Thank you for joining me today.

Speaker 3 0:44

Pleasure is all mine, Tony . I am so excited to be here and I believe it's going to be an amazing session.

Speaker 2 0:51

Fantastic. Well, I'm excited to have you . I just love, as you and I have talked about, is being able to talk with somebody around the world. It's so exciting. So thank you for your time. So, I always like to start out to find out more about you and who you are. Could you tell us a little bit about what is your origin story? How did you get started in financial literacy?

Speaker 3 1:17

Thank you so much for the great question. I, what I do is I help businesses and individuals to learn about money principles so that they can be able to achieve their financial goals as well as maintain their lifestyle. So what led me to become a financial literacy advocate is when I was growing up, I didn't have the opportunity to learn about financial education. So this resulted to me making a lot of financial mistakes, which I was able to correct with time. So I decided that , to be able to help my fellow millennials and other people, let me start to educate those around me. And of course use the internet to help people know some of the principles that I didn't know, so that they can not make the same mistakes, as well as those who are already in the mistake. We find ways to help them correct them.

Speaker 2 2:24

Well, that's great. And it's so important. I think that it's good that you're concentrating on millennials is , I think a lot of financial education right now is geared at people who are of an older age, so millennials sometimes get skipped in that conversation. I mean, would you find that millennials are sometimes skipped

Speaker 3 2:47

Yes. Sometimes millennials are skipped, because we have a totally different perspective as compared to the earlier generation. How we view things is totally different from how the earlier generation viewed. Example is our pattern of learning things is so different. A millennial doesn't want to listen to , let's say their parents, but they're ready to listen to their peer. So you find that a lot of programs tend to skip millennials because they think that they are ahead of what is the , what is considered as normal.

Speaker 2 3:31

That's great. Yeah. And that's something I've observed. And I know that your centre and there's many other personal finance content thought leaders who are geared towards millennials, but they also are millennials themselves. So that that's fantastic. So you run The Financial Wellness Centre. Can you tell us about The Financial Wellness Centre?

Speaker 3 3:57

Thank you so much. Financial Wellness Centre was created or was born on 2019. And , as I mentioned, the reason I started Financial Wellness Centre is to help people and businesses learn money principles so that they can be able to achieve their financial goals, as well as maintain their lifestyle. We seen the current world , a lot of people, they are torn in between should I , how can I maintain my lifestyle and at the same time stick to my financial journey and become financially healthy? So that is one of the goals that Financial Wellness Centre always seeks to achieve through its mission and vision. And just to mention in the , under the Financial Wellness Centre vision , I also started the Entrepreneurs Academy because I realized that a lot of businesses, especially startups, they are always missing out on the critical business principles, which leads to most startups failing at three years or less. So the Entrepreneurs Academy is basically focused on helping upcoming entrepreneurs land some of these entrepreneurial ship principles that they can apply in their businesses to just make sure the ideas of businesses are sustainable and become successful.

Speaker 2 5:36

Fantastic. And I like that you start off with principals and I think it's those basic building blocks that if people don't know them, you can't expect them to succeed. So that's , that's a great approach. And I think it's, you have to always start at the beginning, right? Yes. Fantastic. So one of the things you do is you empower people. Can you tell us about how you empower people so that they can achieve their financial goals?

Speaker 3 6:12

That's a great question, Tony. How I empower people in , normally I offer my products and services online, since I came to the realization that you, to be able to reach a lot of people then using the digital tools available is easier than, you know , visiting them physically. And this has greatly made me and Financial Wellness Centre to be able to impact and help people from all over the world. All the continents, since our services are often online. And one of the things I also realized , most people are on social media. They spend a lot of time on social media. So I took that as a market niche to ensure that as they scroll on their social media account , let them bump into Financial Wellness Centre products and services, as well as any advice that you need and feel that anyone needs to know out there.

Speaker 2 7:19

Fantastic. And so do you feel, just in talking about it with your very smart decision to focus on online, do you feel like the timing was really good with the pandemic , with people discovering your content online?

Speaker 3 7:38

Yes, it is. It's actually the perfect timing because when I check my metrics for Financial Wellness Centre ever since we started, I see these spontaneous growth as people are constantly viewing the services and products you're providing. They're constantly learning from what we share. So it's the perfect time because we are also in transitional period, not just because of the pandemic, but people are now moving from the traditional ways of doing things and coming out to digitization. And of course from digitization, we use tools like any social account or your online presence. So I believe it's the perfect time.

Speaker 2 8:32

Well, that's great. Yeah. And I shared that. I think we were already seeing a trend towards that and the pandemic just accelerated that trend because like we discussed is you can connect with anybody around the world and get so much more information than ever before. And to social media, as you point out, you know, you can also connect with people and just get more information. So I think that's wonderful. And yesterday I had the honor of joining you on your show. Can you please tell us about the Financial Wellness with Sheila Mmboga Show on YouTube?

Speaker 3 9:23

Absolutely. The Financial Wellness with Sheila Mmboga show it's a very informative show that I started I think in 2020 . The reason I started this show is because I wanted to help people or empower people so that they can get to learn strategies that can help them build on wealth, as well as maintain a healthy financial lifestyle. So one of the key reasons for Financial Wellness with Sheila Mmboga, I consider it as a CSR activity, that is community social responsibility, because all the products that are there are for free. So that is a way of me and the Financial Wellness Centre giving back to the world , because you might find the someone who really needs financial literacy products and services, but they cannot afford. So what can we offer them? We can ask them to go to our YouTube channel and get to watch some videos that will help them. As well, we get to, I also started the Wealth Wednesday show segment b ecause I needed to bring people from the financial and business world so that they can share their different perspectives on matters concerning business and money management, which so far has been very productive as we saw yesterday during the show with you. A l ot of people give us very good feedback that they've learnt a lot from industry experts, experts like you. So yes, that is the goal of Financial Wellness with Sheila Mmboga.

Speaker 2 11:19

Yeah, and I would encourage anybody who's watching or listening to this podcast to check out Sheila's show. The link will be in the show notes, so you can easily find the show. There are some great episodes that cover a very wide range of topics. The other thing, Sheila, you mentioned that, that I find just so powerful and important is your philosophy of empowering people. And we talked about that a little before, but I just think you've mentioned that a few times and I think that's something in the financial literacy world that we need to concentrate on. So who do you feel will benefit from the Financial Wellness with Sheila Mmboga Show? Is it millennials? Will everybody benefit from it?

Speaker 3 12:20

Yes, everybody will benefit from it , but usually my target , the age range that I target is from 18 years old, because I believe once a person reaches 18 years, they are able to make financial decisions. And this is the age where most people start making financial mistakes because they do not have financial literacy, maybe from the foundation. Maybe they come from a home where nobody knew about financial education. So our targets, our target market is usually people from the age of 18 years and any other person that is , that has the desire and eagerness to build generational wealth as well as have a sustainable business.

Speaker 2 13:13

Well fantastic. And I agree with you, I think 18 and possibly even younger is you can't start too young in discussing and thinking about financial literacy education. And as you point out is we often lack those tools as we become adults, but yet we're expected to manage so many things : college loans if you go to college, paying your rent, managing your bills , but where do you learn that? So it's fantastic that you have a show where you talk about those subjects. So what are some of the trends that you're seeing in financial literacy education?

Speaker 3 14:03

That's a great question, Tony. I have seen four major financial , four major trends in the financial literacy education sector. One of them being emotions versus logic. A lot of people , they want to make emotional choices instead of logical choices in the financial literacy programs. So you find that someone, they want to have a shortcut when it comes to investment, but when you give them a financial education whereby you are insisting that you need to , first of all, research and understand what you're investing in. They feel like financial literacy is not a good thing. Then the second one is frugality versus extravagance. We live in a very interesting world where everyone wants to impress social media at the expense of their pockets and future. So this has led to many people spending their future money to satisfy today's desires. Example, you'll find someone borrowing money just to buy, let's say a branded shoe because he wants to take a photo, post it on social media, gets likes and you know, and all the nice comments, which is okay, but at what expense, so you find that most people don't want to be frugal. We don't say like, frugality is not being stingy, but it's learning to know what you can afford. And of course , having a , what you call delayed gratification. And then the other point is , we've seen quite a number of people , it's a challenge for people to save versus spend. We're in a very interesting world , cause like 20 years ago, we didn't have internet as your basic expense or basic needs, but right now in your basic expenses, internet has to appear because that is like part of our life right now. So you find that a lot of people, they are finding it, a challenge to save and as the expenses keep on piling up. And another thing is , while people don't want to save money, I've seen a lot of people, especially millennials, they don't want to hear anything about retirement accounts because they believe in you only live once, which has become quite a challenge for us. And the last one is we are having a problem with investing. This is because, based on the trends that happened in 2008 and now 2020, the financial markets going down and extremely most people are kind of scared to invest in anything. That's they prefer to have the money with them and have a checking account instead of a saving account, as well as investing in volatile markets like the stock market .

Speaker 2 17:35

That's great. You know, and I would agree with you those trends and this you point out that frugality and, you know, you're spot on with those trends. And I , I think that those are somewhat common issues around the world. And so I wanted to ask you is what do you feel are common financial issues for people all over the world?

Speaker 3 18:02

That's a great question, Tony. The things that I feel are common issues , financial issues all over the world is , one of them is living on borrowed money. We are in a generation where access to a loan or any credit facility has been made very easy. It's just a click away now. Most of us, we lack the discipline and so you find someone, they borrow money, not because they have a plan on how they utilize and repay it, but because they have the access. So you find, since my account has this amount of money, or my paycheck is worth this much, and they can get access to this amount of loan , I will take it not because I need the money, but because I just want to, you know, use what is available at hand. And another thing is, I've seen quite a number of people, not having a financial plan. They have plans for vacation. They have plans for everything, but they do not have a financial plan. And one thing you can of agree with me. You find people, they can spend even three hours watching a TV show or scrolling on social media, but they c annot sit down for two hours to have a time to check on their finances. So this is something that has led to people not being able to really take control of their money. Rather, they allow money to take control of them. And the last one is lack of budgeting. I've seen a lot of people when they hear the word budget, they feel scared even the facial expression changes because there is the mindset that budgeting is, it's a very hard thing. It's not something you need to do, but you see lack of a budget leads you to not knowing where your money is going. And this is something that has cut across the world. A lot of people don't know how to budget. And as I always say, a budget is a roadmap to your financial j ourney. It guides you where you're going with your money, which helps you know what o r where your money is going and how much you are able to utilize at a given point.

Speaker 2 20:39

Well, definitely. And I completely agree with you, especially about budgets. I try to use the word cashflow statement to try to change that because people have that negative connotation, but I think that ties into the trends you were talking about is that if people spent that time writing things out and thinking about it, that might help with some of the emotional choices that people make with finances as well. So frugality issue , I know a few of my friends who are sneakerheads in the States and they buy a lot of the new sneakers that come out and, you know, it's fine. They can collect it, but the shoes in US dollars, run two or $300 or more a pair. And so it's like, I don't know, maybe someday their sneaker collection will be worth a lot of money, but on the other hand, they may be suffering with their retirement savings. So yeah , those , those are definitely issues all over the world. So as we talked about that is, you know, each country is unique. What is unique about finances in the United Arab Emirates?

Speaker 3 21:57

What is unique here is the taxing method. We have a very good taxing methodology whereby the income tax is not, the income earned is not taxed. So this gives people the ability to do more with what they earn. So if you are on a paycheck , then your paycheck is not a tax. So that is one very unique thing because all of it, most countries in the world, they tax the income or the salary people get. So that is the uniqueness with United Arab Emirates, as well as there is very easy access to bank loans, especially credit cards and car loans. Now, which has been like a sword that has, you know, your income is not taxed, but you're given easy access to credit card . So you find that many people, they are misusing the credit card, which in turn leads to their paycheck being affected grossly. So yeah, those are, those are the three unique things about United Arab Emirates with finances. There is very easy access for credit cards and as well as auto loan, you can easily get it. However, things like mortgage and any other kind of loan, they are a bit strict, but yes.

Speaker 2 23:35

That , that's interesting. And I know in the U S there's a lot of people who feel that the U S would be better off without an income tax. Does the United Arab Emirates , do you have a value added tax then on goods that you buy?

Speaker 3 23:54

Yes, we do have, it actually started maybe like three years ago, but before it wasn't there.

Speaker 2 24:00

Okay. Yeah. You know, that's a very different way of doing it, and that's, that's a whole other subject getting into tax law and everything. So this is a question I ask everybody , what is your number one tip on being financially prepared?

Speaker 3 24:22

My number one tip is always have a budget and an emergency fund. It's just because we have seen with the pandemic, the COVID-19 pandemic, most people did not have an emergency fund, and they were grossly affected including businesses. So having an emergency fund will cushion you against unforeseen issues or things that may arise. And I always say an emergency fund should be able to cater your expenses for at least three to six months. And if you don't have a lot of financial responsibility, try your best and make it to be one year so that you can reduce your chances of having financial stress. And another one, which I made it to be one is to budget. Always have a budget, no matter what, no matter how your income is, cause I've seen people saying, I earn very little, so I don't need a budget. Please have a budget, whether you earn little or you earn a lot, have a budget as it helps you learn how to maintain good money habits.

Speaker 2 25:36

Well , that's great advice. And I agree with you have having a budget or at least thinking in terms of spending less than you bring in. And that gets into the points that you brought up earlier about the free credit is that just can wreck a budget, is all of a sudden people have significant loan payments. And I think the other thing that you bring up is critically important. And especially people found this during the pandemic is having the emergency fund. A lot of people don't have one and a lot of people suffered during the pandemic and are still suffering because they've lost some of their income or even their housing and they didn't have an emergency fund and it had a dramatic impact. So that's, that's great advice. So Sheila, as we wrap up , and I'll put all URLs in the show, notes is what is the best place, where can people learn more about you and keep up with you and your work?

Speaker 3 26:38

Thank you so much, Tony. People can contact me on, we have a Facebook page under the name Financial Wellness Centre. They can also check out our LinkedIn page Financial Wellness Centre, as well as follow us on Instagram @financialwellnesscentre, or write me an email on financial wellness centre. Sorry. An email at info@financialwellnesscentre.co.ke

Speaker 2 27:10

Fantastic. Well, Sheila, thanks again for joining us today. Really appreciate your time.

Speaker 3 27:17

Pleasure is all mine

Speaker 2 27:20

Well, fantastic. And thank you everybody for watching or listening to the Tony Steuer podcast. Please be sure to subscribe. Until next time.