Useful Personal Finance Tips for Kenyans
How far are you with the #52WeeksSavingChallenge? We are approaching the end of week 43 and by now things should be looking good. Your saving toward that vacation, debt payment, emergency fund or whatever your goal was are way up to date.
Let’s do some simple math;
If your goal was to save for a holiday trip, and you pledged to save Kshs 100 compounding by Kshs 100 each week, by now you should have saved Kshs 94,600.
Yes, that’s right. And you have nine (9) more weeks to go. That means, by the end of week 52, you will have saved about Kshs 137,800. This amount is enough for a return trip to your preferred destination!
Most likely, you gave up on the saving goal by the end of week four (4) and spent the little amount you had saved.
So, how do you set a savings goal and stick to it?
Below are seven tips on how you can be financially free by doing very little each day.
1. Use the One-step Rule to Improve Your Personal Finance
This rule applies to almost anything in life. If you want to get better at anything, get started and improve each day. Take the first step and then repeat the same tomorrow.
The Art of Compounding: Start Today, Repeat Tomorrow.
Do you want to;
- Start a business? – Start by coming up with a business name or writing a business plan.
- Make more money? – Make an Extra Kshs 100 or Sell one item.
- Write a Novel? – Write one sentence.
- Finish a book? – Start by reading one page.
- Save More? – Start by saving Kshs 50 today.
- Be debt free? – Pay the lowest debt first.
2. Live Below Your Means
You will never be financially free if your lifestyle directly changes with income level. By living below your means, you can save up the extra earning.
3. Save At Least 10% of Your Income
There is a rule towards financial freedom, “Always pay yourself first”. This is easier said than done! Saving is hard especially with all the bills we have to pay and debts we ought to clear. We save for a short period and end up using the money. A good tip on saving is to sign up with a bank that deducts 10% to 20 % of your earning and deposits the same in a fixed account.
4. Have Multiple Sources of Income
Having an extra stream of income gives you more control over your financial status. There is always something you can do with an extra ten or fifty thousand shillings at the end of the month. With the internet, there are many side hustles that can easily make you that amount. The good thing about side hustles is that you don’t have to quit your day job or work long hours.
5. Create and Follow a Budget
One way to be in control of your personal finance is by having a budget. We are living in a world that encourages impulse buying through well-crafted advertisements. A budget can help you in estimating your expenditure and living within the set limits.
6. Track all your Spending
By tracking your expenses, it is easy to spot where your money is going and cut down on unnecessary expenditure.
7. Make Good Investments
Use your savings to invest in assets that make you more money over time. A good investment vehicle is one that earns you money!
8. Pay Up Your Debts
Bad debts can hurt your finances. A good rule is to avoid them at all costs. If you are already caught up in debts, try your best and clear them as soon as possible.
List of steps on how to pay up debts
- Make a list of your debts
- Avoid new debts at all cost
- Set up a debt payment plan
- Create a Budget
- Reduce Spending
- Look for means to increase your earnings
- Aim at paying up Big Debts first
Which other tips do you use to improve your personal finance and move toward financial freedom? Share them in the comment section below.