At CedisPay, we believe mastering money starts with understanding how true wealth is built. The formula for real wealth growth is: Net Income + Time + ROI – Inflation – Taxes = Real Wealth Growth. Let's break down each component and see how it connects to CedisPay’s 7 Baby Steps to Financial Wellbeing, especially how net income and expense tracking impact your financial journey
• Net Income & Budgeting Expenses: Net Income is your take-home pay after taxes and deductions. Understanding this is key to creating a budget that aligns with your financial goals. Expense tracking ensures you're managing your spending effectively.
  • CedisPay Step 1: Protect Loved Ones: With a clear understanding of your net income, you can allocate funds toward life insurance, ensuring your family's security in case of an emergency
  • CedisPay Step 2: Save GHS 1,000 (Emergency Fund): Knowing your income and tracking your expenses help you determine how much you can set aside for an emergency fund, preventing unexpected costs from derailing your financial progress
  • CedisPay Step 3: Reduce Debt: Keeping track of your income and spending habits allows you to control your debt. With budgeting, you can ensure that your debt does not exceed 30% of your income, giving you more financial flexibility
• Time: Time allows your money to grow. The more time you spend managing your money well, the greater the return you can expect over the long term:
  • CedisPay Step 4: Build a 6-Month Emergency Fund: By budgeting your net income wisely, you can prioritize building a safety net that will protect you during financial setbacks, using the power of time to grow this fund
• ROI (Return on Investment): Your ROI is the return you get from investing your money. A higher ROI means greater wealth over time, which is critical to achieving financial success:
  • CedisPay Step 5: Invest for Retirement: With a clear understanding of your income and budget, you can allocate 15% of your income toward investments, maximizing your ROI to secure a comfortable retirement
• Inflation: Inflation erodes the purchasing power of your money, so it’s important to ensure that your wealth grows faster than inflation:
  • CedisPay Step 6: Save for Education: Education costs typically rise faster than inflation. By budgeting your income and planning ahead, you can set aside funds to stay ahead of rising education costs
• Taxes: Taxes reduce the amount of money you can save and invest. Managing taxes efficiently is key to maximizing your wealth:
  • CedisPay Step 4: Build a 6-Month Emergency Fund: By tracking your income and expenses, you ensure you don’t have to dip into your investments or retirement funds when facing tax-related or unexpected expenses
  • CedisPay Step 5: Invest for Retirement: Efficient tax management, such as contributing to tax-advantaged retirement accounts, helps you grow your wealth faster and reduces the impact taxes have on your returns.

Bringing It All Together: CedisPay’s 7 Baby Steps

Net Income, Time, ROI, Inflation, and Taxes all play a critical role in how money works and directly tie into CedisPay’s 7 Baby Steps. Here’s how:
• Protecting Loved Ones: Knowing your income and managing expenses allows you to allocate funds for life insurance, ensuring your family's future security
• Building an Emergency Fund: By budgeting effectively, you can save for unexpected costs, avoiding debt when emergencies arise
• Reducing Debt: Track your income and expenses to ensure that you keep debt manageable and under control
• Building a 6-Month Emergency Fund: Use your net income and time to build a financial cushion that can help you weather any storm
• Investing for Retirement: Prioritize investing a portion of your income for the long term, maximizing ROI and outpacing inflation
• Saving for Education: Budget your income to plan ahead for rising education costs, ensuring your children’s futures are secured
• Building Wealth and Giving Back: Grow your wealth through smart investments, manage taxes efficiently, and contribute to your community

By using CedisPay’s 7 Baby Steps, you’ll build a strategy that ensures every dollar you earn works for you, helping you achieve long-term financial success and security