Most people find themselves in difficult situations when it comes to handling finances, especially in this era. Money Market Funds (MMFs) are unit trusts in which one can invest, with money earning interest daily, thereby improving the economic status of individuals and the country at large.
MMFs are pools of money contributed by investors to grow their portfolios, especially low-income retail investors. Once invested in an MMF, money earns interest daily, requiring only a few documents and, in most cases, a minimum investment of Sh100. Once deposited, the money can be withdrawn at any time because it is a savings scheme that helps individuals manage their finances and avoid squandering their money.
It is also important for teenagers to practise these kinds of financial habits, as well as for those in institutions of higher learning. There is indeed great value in financial planning, as it provides comfort and security. This is a good option for investors.
Money Market Funds can promote healthy saving
habits instead of locking money in a fixed deposit account, where the money may
not earn daily interest. Although interest rates fluctuate, MMFs remain
worthwhile because they encourage consistency in saving. A student in high
school can even start investing in Zidii MMF and begin saving through a
parent’s phone. The key is to start learning about savings plans and investing
wisely.
Money Market Funds can also drive the economy by reducing dependence on bank lending. It is unfortunate to see a 40-year-old employed person who does not know how to manage his or her finances simply because they lack basic financial management skills. One simple tool available is the Money Market Fund. Banks can also increase productivity when people have a better understanding of financial management and investment. As a result, lending rates may reduce. This will help drive the economy by enabling people to become more financially independent rather than dependent on others.
MMFs can also support the economy by providing funds that can be invested in government securities. Their custodians and trustees are banks, although they operate under separate management. This can encourage greater reliance on domestic financing rather than excessive external borrowing. Such an approach promotes productivity within the nation instead of depending heavily on foreign countries. It may also reduce the risks associated with government borrowing from abroad, helping to strengthen the economy by limiting the amount of interest paid on external loans.
This calls for students to begin embracing savings and investment schemes using the pocket money provided by their parents. Indeed, it would be a great idea to introduce financial literacy classes in schools, from lower to higher levels of education. This would help drive economic growth through proper financial management while reducing dependency and easing financial pressure on parents.
Financial inclusion can also be enhanced by giving small-scale savers access to Treasury bills. As individuals increase their savings, they can invest more in government securities, effectively lending their own money to the government and earning returns when it is repaid. This is another way of supporting economic growth. It is not always necessary to rely on foreign debt when internal markets can create opportunities for citizens to invest directly in government instruments.
Many people complain about the state of the economy, but constant complaints alone are not always productive. Let us consider how we can build our own portfolios with the little we have and improve our economic standing instead of only criticising the country's situation. Saving and building a portfolio require discipline, consistency and, most importantly, avoiding unnecessary expenditures that may not be important in life.
In times like these, when job opportunities seem uncertain, it is better for individuals to build and strengthen their own financial portfolios.
Making sound decisions and rational choices in investments is a healthy practice. Money Market Funds help drive and boost the economy while also benefiting the investors who participate in them. They provide comfort through financial investment and help individuals build a better future not only for themselves but also for generations to come.
Jamlick Weru Kinyua
Student, Mount Kenya
University
