In this episode, Sam joins Ato, a consultant at KPMG, whose good habits allowed him to become an investor and homeowner. But Ato wasn’t that financially savvy when he was 18, and he learned it the hard way!

For Ato, It was just the norm for us to have an overdraft, all his friends would have an overdraft and act like nothing was happening. Banks allow students to have an overdraft without the need to pay interest, which develops the attitude of ‘ free money ‘ into students. Ato thinks that most students have the mindset of free money from student loans for living during their studies which carry on after they graduate due to lack of financial literacy education.

Money is a taboo topic in certain situations. People didn’t really care and wouldn’t openly talk about it, when you’re at university everyone’s the same but when you are out of university and you’re working, nobody wants to talk about the topic of money in depth anymore. You are looked   down upon a little bit if you have debt.

To repay the debt, it often requires cutting back on spending and saying no. Ato shared how it was difficult at first to turn down going out and suggesting cheaper alternatives but realising that each ‘ no ‘ meant that his debt was getting paid off felt good. It felt like he was getting somewhere with this and he would manage to get rid of all of the steps and time. So although it was hard, it was definitely worth it.

Ato shared that he used to want the latest trainers, the latest clothes. And then he got to a certain point where he was sort of budget in line with my overdraft and where he couldn’t spend as much and realized he wasn’t missing out on anything. When you buy the latest phone, not long after the next one will come and you’ll feel like the new version is better.

Understanding cash flow

Ato mentioned that young people forget that they need to understand their cash flow. Cash flow is what is in very simple terms the sum of money in and money out. The problem is in this day and age, when we live in this social media era, or reality sounds depressing. It’s depressing because everybody is having so much more glamorous life on Instagram. It looks like from the outside, everybody’s having a better life than us.

There are other things you can do with your money. You can save it. You can use it to free up your time in the future. You can pass it onto your next generation. So there’s so many other things that you can do apart from spending it on things you know you don’t actually want. Educating yourself on cash flow is important and It’s just about wanting to do that. There’s so many people out here that provide free training. Help make it as easy as possible to understand it. Ato believes the financial education area is still going to grow in the future in the next five to 10 years as financial education becomes more important. Financial education will set your mindset and the habits will compound over time.

To check out Ato’s story , check out the podcast episode here!