Money Management
November 11, 2024
Safaricom launched its M-Pesa App in June 2021, which has been of help to people on the go. With access to statements and a breakdown of one’s daily expenditure, the issue of how to efficiently save money cannot escape the user.
I mean, it would shock you if you received notification that you've spent over Ksh35,000 in three weeks, yet you can swear you haven't handled that amount in one month. I've been there too.
There's no chance M-Pesa could exaggerate your monthly expenditure. So this only implies that someone isn't keeping their money in check. And that's very dangerous, especially after the recent survey conducted by the Twaweza charity concluded that about 60% of families in Kenya could not place food on the table three times a day.
The best way of saving is by exercising discipline on how we spend. It's best to start it simply by spending based on your budget.
Most of our expenses revolve around needs, the things we cannot do without, and wants, which aren't crucial to our being but can enhance our way of life. Understanding the difference between needs and wants is critical in balancing the amount you put in either.
Keeping your expenses on needs within the suitable threshold might allow you some extra cash to put on your wants. On the other hand, majoring in your desires might deny you the joy of saving while meeting all your needs as required. Learn more about how to handle your needs and wants.
After understanding where to base your expenses to save more, here are six strategies you can adopt to ensure you save more, even as you meet your needs and wants.
While we are living in a digital era and transitioning to cashless payments, there are advantages to paying in cash that you may want to consider.
First, there’s the psychological effect of seeing actual cash decrease from your wallet that may make you want to rethink the purchase that you are making.
And second, there are all the transactional costs that are associated with paying either via mobile money or cards, depending on the service provider.
If for example, your daily transactions cost you Ksh20 in money transfer fees, that adds up to over Ksh7,000 in 12 months. You could invest that amount in Exchange Traded Funds (ETFs), real estate investment trusts (REITS), bonds and stocks to make some money or add to your high-yield savings account.
How many cable services have you subscribed to? It's nothing strange to find one individual subscribing to DSTV for football, Startimes for movies, and maybe Netflix for shows like Squid Game or Money Heist, among others.
I've not mentioned Zuku internet.
While it is true that we benefit from these services, we get a little from the whole package because you only enjoy binge-watching on weekends since you come from work too exhausted to even get by the 9 pm news.
Use your digital tv to watch all the free-to-air channels available without you spending a cent every month. Instead, pay the guy at the cyber cafe for your favorite movies and TV shows. They even give handsome discounts when you buy lots of movies at a go.
Based on this revelation, how much are you about to save by this time next year?
That's a whooping over Ksh. 126,000 in a year in your savings account.
Buying in bulk is an art of shopping that has tremendous results. When going shopping, you can buy things like cleaning supplies, toilet paper, canned food, paper towels, among others, in bulk. Make use of your freezer to give the perishable stuff longer shelf life.
Hint: Buying in the local supermarket might not save you much. However, you can take advantage of their occasional deals on select items to preserve more cash. You can also shop at a Carrefour branch near you if you want better shopping deals. You can also buy on their online platform.
If you need groceries in bulk, you can go to markets like Muthurwa, where you'll get value for money. If you live outside Nairobi, the thumb rule is that you visit your local market on market days. What you might accomplish with Ksh. 100 might surprise you.
A staycation is similar to a conventional vacation, except that you spend your vacation at home or even within your region. You are taking a break from spending money on pricey hotels and transit to appreciate the sights in your area which you haven't truly explored previously. While holidays allow you to relax, they necessitate planning ahead of time. They can drain a significant chunk of your finances, especially when planning to travel in style. On the other hand, a staycation does not require any advance plan and will cost you a fraction of what a conventional vacation would.
Remember the 30-day rule? Well, you realize it fits in here like a piece to a puzzle. As discussed earlier, we all need to draw a distinct line between wants and needs. Otherwise, we will spend money on something that isn't a priority. That's what the 30-day rule is all about. So, if you find yourself in love with a product, list it down at the bottom of your checklist and then leave it for 30 days and see if you still need it.
Since their introduction in the market, generic brands have come a long way. Likewise, their product labeling has changed dramatically in recent years. Previously, a basic, black-and-white box of Weetabix has been transformed into a vibrant spread that resembles its "genuine thing" name-brand twin. So, while it feels pretty good to put on some Gucci wear and stuff like that, it does not also hurt to purchase generic brands. The quality may not be the same, but you will be saving half what you would spend.
According to psychological studies, people with similar characteristics can learn excellent behaviors from one another. And this applies to money as well. However, the good book also says that two are better than one. So, here's the catch:
If you can get one or two like-minded friends, you can decide to take on the savings challenge. Friends save a certain amount of cash based on the challenge's rules. For example, suppose you agree to do a Ksh. 500 money-savings challenge; you will save every Ksh. 500 bills you receive. There are a variety of fun money challenges to select from to help you meet your savings goals and improve your money management skills.
There are different ideas on automated savings, but I love most using Automatic savings agencies like Apps. Many new mobile applications and savings tools have hit the market in recent years, promising customers new ways to save money. Round-up apps, for example, allow consumers to automatically save their spare change upon purchase by "rounding up" the amounts.
These applications might be for anyone who has ever thought to save money without thinking about it. Check out the Digit app, for instance, if you've ever felt that you can't "manage" to spare any amount since it would suck too much money out of your daily life. It uses artificial intelligence to evaluate your spending patterns. It also saves money for you without you deciding.
Arguably, nothing appears to save money than doing DIY fixes. DIY is an art I'm exercising at home. For instance, when there are issues with your sink piping, that's relatively easy to solve. Let alone shower trouble. In the end, you will notice that you are saving a lot on simple plumbing services. Leave the hard stuff to the professionals, but check out the different tutorials on YouTube before you delegate.
Do you still remember "mali kwa mali"? Well, if your region has these guys, you can take advantage of the offer. It's the perfect way to dispose of the items you no longer need at home for stuff that you deem helpful. But it does not end there. Another way you can dispose of what makes your life miserable is by selling your items to friends or on selling platforms like Jiji and Pigiame, for instance.
I remember purchasing my Infinix Hot 3 phone when it first arrived; it, however, made my life miserable for the next two years. I later sold it for Ksh. 5,000 to a friend and got me an Honor 6A from Jumia on offer at Ksh. 4,000 and some few hundreds. What do you think about that?
Any time you want to keep some coins in your pocket for future use, please avoid buying from supermarkets. They are great places to shop, especially during the festive seasons, but you can get better discounts on wholesale stores and marketplaces.
The advantage you gain by buying from such places is that you can negotiate and arrive at a fair price for you and the seller. But you need to learn negotiation skills. Learn how to bargain for the best deals in Kenya here.
Saving up for future accomplishments is possible if we can exercise the art and discipline required in our spending. See you in the next one.
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