Maximizing the income stream and optimizing the money that goes out is perhaps the oldest secret in the financial success book. Everyone strives to achieve that, however, life has a way of complicating the formula.
Look for instance, some perennial issues like:
- Undisciplined spending habits
- Lack of budgeting
- Failure to save and invest
- High education and lower employment rates than never before
- Extended duration of living with parents
So, how do you become a smarter spender?
- By making a budget
- By shopping smart
- By auditing your recurring payments
- By travelling frugally
Here are some tips to get you started
Read Also; 6 Ways An Online Loan Can Help
Saving your moneyPaying yourself first is considered a golden rule by many financial experts; the idea is simple, once you get paid, ensure that you put a certain percentage of the money into your savings account first, then you can plan with the remaining amount. Having a well-defined savings goal can be instrumental in this, as it will act as your guide in allocating the funds.
The ApproachWith so many expenses to deal with, you might find it challenging to set aside money for yourself. A good approach should be to have the money automatically deducted into your savings account before it reaches your hand.
You can also look at saving as an investment. The idea of your money working for you can serve as a motivation for saving. If this excites you, then you may consider saving with a SACCO in Kenya. Some give you dividends, or interests. Others will give you both. Just be sure to do your due diligence upfront.
Saving money tips
- Record your expenses
- Make a budget
- Choose your priorities
- Make saving automatic
Managing MoneyAnalyze your monthly income against expenditure; like what you own vs. what you owe. It is also vital to note down how much money you are saving every month. Doing a financial inventory will give you a clear understanding of your cash flow, which is a huge step towards making sense of your financial health.
The ApproachBegin by writing down every money that goes out – whether it’s shopping, expenses, rent etc. Also write down how much money you intend on saving. Your total expenditure should not exceed your income, because then, you’ll be living beyond your means.
Managing money summary
- Track your spending
- Cut down on expenses
- Be flexible
- Save more
BorrowingBorrowing money from banks or SACCOs in Kenya is the simplest way to get the required funds to grow your business. Before taking a loan, ensure you have a clear blueprint on how you’re going to use the money, and your repayment plan. It’s also a good idea to calculate the risks involved upfront.
The ApproachTake time to shop around. Not all financial institutions are created equal, some offer incredible deal, while others, are out to squeeze you dry. Know the difference between secured and unsecured loans, understand the annual percentage rate, interests and more.
- Shop around
- Work out your budget
- Don’t borrow on the spur of the moment
- Make timely payments
- Watch your credit limit
- Run regular credit report
- Create a payment plan
Post By ; Olivia Kibaba, - Business Blogger