Financial stability is one of those things none of us would turn down. Sadly, however, many of us go through life struggling financially, even with a steady source of income. This tends to indicate we’re spending more than we earn, throwing us into a financial cycle that doesn’t lead to freedom.
Financial advisors, however, will tell you it’s possible to come up with a wise spending and savings culture that will eventually lead to financial freedom. We’ve rounded up some of the top tips on cutting out expenditure that’s not helping you achieve your goals.
1. Eating out often
According to Waceke Nduati, the founder Centonomy Kenya, the amount you spend on lunch could be used to do so much more. If on average you spend Sh200 for lunch, five days a week, and work four weeks in a month, you’ll have spent Sh48,000 in a year.
Assuming you’d carried lunch instead and saved this cash, you had saved that money you could open a business that can have returns of more than Sh500,000 a month once you break even. Think about that! While it is agreeable that you may need to meet up with friends and family on social places, you can only do much of those meetups. Spending money regularly eating out depletes your budget and may hinder your financial growth. If it becomes hard to minimize the meetings especially if you are a business person that needs to meet clients, make sure that you go for the cheapest option in the menu. Do not ran bankrupt in an endeavor to please people in restaurants. Secondly, carry lunch from home if you work a day job.
The Kenyan market is continually getting influxed with so many subscriptions of services targeting the average Kenyan earner. This means that you might be tempted to subscribe to services such as multiple internet services that eat up your money even without your consent. You will be surprised at how many people subscribe to services because they seem cheap or because a service provider approached you. Instead of subscribing to every service that comes your way, take advantage of the free services such as the free to air services on TV, free internet at the office or the cheaply provided Wi-Fi at cyber cafes. Unless the services are very crucial and actually contribute to your financial gain, you should avoid them like a plague.
Most Kenyans seem to attach certain class of gadgets to the financial status of the person owning them. This leads to a sort of a rat race in an endeavor to acquire these latest phones, music systems or even personal computers. Unless you really require the output from a high end laptop or pone there is no need of buying just to impress your circle of friends or to be at par with them. Instead of spending money on unnecessary gadgets that you need not, you can consider saving the money and investing it in an income generating venture.
4. Social events We all love celebrations from baby showers, birthday, bridal shower or any other life milestones that need celebrating. It is important to realize that you do not have to be part of all the celebrations that your friends invite you to. Overly committing your money on these events can eat up your money. Be moderate on your commitment and these amounts of money that you give and invest the rest of the money on meaningful ventures that have returns on investment.
5. High insurance policies Getting insured is a prudent idea, no doubt about that. You however should be careful on the companies that you choose and the mode of the contribution. To save up much on insurance, do your research and identify an insurance platform that works for your needs and stick to it. Avoid hopping from one company to anther as you may lose money in the process. Also, expert advice that if you need multiple covers for your various needs you should find a company that handles all your needs and avoid working with multiple providers.
6. Buying Brand items Buying expensive items because of the brand can end up eating up your money. For example, when you walk in a supermarket you find different brand items such as tissue paper – Their price gap sometimes is outrageous. Why buy a piece that is costing you Sh50 while you could get the same size at Sh20? They serve the same purpose so avoid overspending just because you want to buy an item of a certain brand.
7. Impulse buying Mindless spending that is impulse buying will render you financially immobile. Before going for shopping make sure you make a list of the items that you need to purchase beforehand. This will make sure that you do not spend extra money on items that are not necessary. On the other hand, avoid spending money on items that you consider low cost such as coffees, candy or bottled water. You may not notice it but such small items end up eating much of your budget in the long run.