How you wonder? It’s easy, the way you spend your money coupled with your saving habits and your financial plan matters most in determining your wealth. It may sound like a lot of complicated work but it is all about good money habits.
It’s ok to admit that managing your finances can be very difficult but you only need to know how and follow through with your plan and this is where discipline comes in.
Here is a list on how to manage your finances.
1. Negotiate Everything
The best way to save money is to bargain. Buying something with the first price given by the seller is never a good idea.
You should always try to get the cheapest price for whatever it is you are buying. This will help you save a few coins that will go a long way in improving your financial status.
It is a known fact that vendors quote very high prices to allow them make a lot of profit and to leave room for bargaining. Do not spend more than you need to.
For example instead of paying 5,000 shillings to buy shoes, negotiate and bring the price down to around 3,000. You end up saving 2,ooo shillings in the process.
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2. Keep Your Expenses Below Your Income
Most people in Kenya are living way above their means. This is why so many of the people with good jobs are still in poor financial situations.
Your goal should be to be rich not look rich. Once you master this it will be relatively easy to achieve financial success.
For example, there is no point in living in an upscale neighbourhood where you pay 40K shillings in rent yet you earn 60K. It may seem like you can afford it but rent is not your only expense. When you add on bills like electricity, water, food and transport you will be left with little or no money at all.
Therefore, strive to live below your means if you want to have more money in your account at the end of every month.
3. Separate Business Funds From Personal Funds
If you have a business and are employed at the same time or even if you are just self employed, you should always separate your business money and personal money.
This provides financial protection in case your business goes under or something goes wrong. Doing this will also ensure that you can clearly see your profit.
4. Plan For Your Future
We have all heard this countless times. Planning for your future is the best way to ensure financial stability and security.
You should save for your retirement and a rainy day. This is because you never know what might happen. With all the retrenchment in big firms, you might be out of a job for a while, you need to have money to keep you going during that time.
As for your retirement no one wants to be struggling with money issues in their old age. The best way to avoid this is by starting to save early.
You should also decide where you want to be financially in the future. Having a plan will help you work to achieve your goals.
You should always strive to diversify your source of income. Find other sources of income, whether it is through businesses , investments or part time jobs.
For example, instead of just relying on your income, you can choose to start a business or take up free lance jobs like writing or data entry.
It is important that you plan if you want to be financially successful keep your focus and find alternative ways to achieve your goals, the sooner you start the better. Being able to manage your finances is the first step to ensuring your financial success.
The writer is a Communications Officer at Jobs Kenya Network Services, a leading Recruitment firm that offers CV Writing, Job Placement & Career Advice. Email firstname.lastname@example.org