One thing that the 8-4-4 system did not teach us is that getting a job and living paycheck to paycheck is a bad way to go through life.
Temptations are everywhere you look and the need to splurge is usually very strong around payday. Once that bank notification hits your phone, that Whatsapp group is lit! In as much as you should have started yesterday, it’s never too late and now is the time. The minute you read this, just know the good Lord is trying to speak to you and your children in future.
Here are 5 things you need to know in order to be financially smart:
Stick to a budget, always.
First things first, you have to know your own necessities and how much they cost. Even those who have lots of disposable income know how much they can afford to spend on what. We’re not here to tell you how much to spend on rent, on groceries, or on fancy specialty cocktails — but we are here to tell you that you should decide what’s the best amount for yourself. Once you’ve factored how much you can afford to spend on something, STICK TO IT.
There are very many apps that will help you track your spending and discipline you into being financially sound. an example is Budget tracker available on the Google playstore.
Don’t waste money
It might look cute but do you really need it? like really really? Most of the things you’ve splurged you can definitely live without. So next time you pass by a fancy window display, stop and ask yourself out loud “Do I really, really, really need it?” This will stop you right on your tracks and you’ll feel better that you didn’t buy those shoes that will soon become Kenya uniform and you end up resenting it.
Know that every person’s situation is unique.
Ever heard comparison is the thief of joy? Your best friend might have a sponsor who caters for her every financial need but you along with your precious pride cannot go buy that designer bag just because she also has one. Stay in your lane darling! As the swahili say ‘Utapasuka msamba’ trying to keep up with the Joneses.
Image Source: Longdistance-lover
Customize your experience to fit your own needs. Don’t feel guilty if you don’t stress about loans the way your friend does. The most important thing you can do to be financially intelligent is to admit there’s always more to learn, always more to save, and always room to grow.
Make your financial goals lofty yet attainable.
There’s a pretty common rule in financial planning called the 50/30/20 Rule. This states that you should spend 50% of your income on necessities like food and rent and 30% on discretionary and incidental purchases — and that the remaining 20% should go right into your savings. But when you put money into your savings, what is it there for? It’s important to note that those savings are not meant to be a rainy-day fund or a big splurge.
Theoretically, you should have enough money saved to feel comfortable and taken care of should disaster strike — should you lose your job, become seriously ill, or experience some other life-altering situation that would cost you a lot of money. The necessary amount of money you would require to live on is different for every person — but a good place to start is to calculate six months’ worth of living expenses (everything from rent and car payments to groceries and utilities.
Beware of the ‘sale’
Most of us hear the word sale and we immediately open our wallets, swipe our cards and empty our life savings. If a dress is being sold at Kshs.3000 down from Kshs.4500, you have not saved Kshs.1500, in reality you have spent 3000 because the vendor will not Mpesa you the difference. The idea of a sale is a psychological trap that all people fall for. You’ve heard of stampedes and fights breaking out all in the name of a sale but don’t be fooled honey, either way, the vendor is winning and you’re loosing.
There’s nothing sweeter than financial freedom girls! 6 Ways To Shop On A Budget In Nairobi And Still Get The Hottest Clothes