MAKING SENSE OF YOUR CENTS
Everyone at some point feels like their money is just not enough to meet all their expenses no matter how much money they make? What’s that saying? More money, more problems! If it is any consolation, the feeling that your money is just not enough is universal. It takes a lot of dedication, sacrifice and a strategic planning to manage one’s finances even when you have very little to live on. Here is how you can do it
1. Track all your expenses.
Before you pull out your hair and start complaining how scarce money has become, be honest with yourself in regard to your expenses. Do you know how much money you spend each month, week and day down to every cent? I know what you are thinking, this is not being stingy if anything it is being prudent. Note down all your daily, weekly and monthly expenses either on a notebook or using a free mobile tracking App such as AndroMoney and MoneyManager. To get an accurate picture of all your expenses, track this for about a month or two. You will soon find out where each coin goes to and this can be an effective wake-up call to change your spending habits.
2. Create a budget.
Now that you know where exactly every penny is spent, make a budget that categorizes your expenses. Whereas it may seem like every expense is necessary truth is it really isn’t. That two hundred shillings of a take away coffee three times a week may not seem much but if you made coffee in your office instead, you would save some money that could go into something else. Categorize your expenses by separating the needs from the wants indicating every expense and their due dates where applicable for example electricity and water bill payable on 3rd of every month. If you have any debts, having a repayment structure should be at the top of your budget list before you spend any more money.
3. Invest for a rainy day.
Once you have determined how much you spend make a plan to start saving and investing money for a rainy day. While it doesn’t seem like it Insurance is a form of investment. People generally don’t like to think that a calamity can befall them such as falling sick, getting an accident that leaves them disabled or even losing all their property to a fire, until it happens. Prioritize the things that money can’t buy such as your peace of mind knowing that should your kids or any family member fall sick they are taken care of because you have taken an insurance health cover for them. To attain financial stability, you first need to protect yourself and your family and your business so that you have clarity and peace of mind to go out and find ways to make money. Some insurance covers such as Life Insurance help with reducing your tax bill.
Have a risk-free week!