I felt a strain in my back and realized it was because I was hunched over trying to read from my notebook in the fading light. I stood up to go switch on the light and that’s when I noticed I wasn’t alone.
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2/ At a corner in the back, I saw the top of someone’s head peeping over the desk dividers of our open-plan office.
Eric was meticulously inspecting every company transaction from the previous month.
3/ He dotted every “i” and crossed every “t” in our accounts and expected nothing less from his colleagues.
Like Eric, most of us are careful to include every detail when dealing with our employer’s money.
4/ I guess we do so because of the fear of losing a job or being arrested for fraud. In contrast, most people cannot account for 20% to 40% of their personal spending.
5/ The only amounts that are clear in our budgets are the ones imposed on us by others such as rent and loan repayments. We completely lack accountability when it comes to our personal finance and it shows at the end of the month.
6/ Many of us don’t save and invest, or, we save and invest very little towards our goals.
There is hope though. Start by simply knowing where your money goes.
7/ Try this for a month and send me an email on the results: Write down every shilling you spend for 30 days; like it was your boss’s money. Don’t judge yourself, simply write down where your money is going.
8/ If you are married, do this as a couple because you often spend on the household, not just yourself. Be thorough and account for everything; Mobile money transfer charges, bank charges, Boda-boda rides, sweets and treats, etc.; write everything down.
9/ My wife and I did this soon after we got married and we found that we were spending more on take-out food than our rent. This may sound like a middle-class problem but we have seen this same issue across all income levels.
10/ Centonomy worked with a mechanic who discovered he was spending 20% of his income on buying lunch at work, unnecessary mobile money transfers cost and taking an extra Boda-boda ride each week.
11/ A top executive in our class didn’t know that he was spending over KES 80,000 on drinks in a month and yet he is not an alcoholic. As his income grew he moved to more expensive clubs and became an ATM for his friends.
We still eat out with my family, only now with a plan.
12/ A plan that allows us to save and invest while we enjoy the life we work so hard to earn. If you don’t know exactly what is happening with your money then you feel powerless to change your situation. Eckhart Tolle said, “Awareness is the greatest agent for change”.
13/ Act like you care about your money by tracking your spending and it will empower you to make better decisions.
Article by Waithaka Gatumia
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How much do you really cost? Are you in touch with the amount of money it actually takes to sustain your lifestyle?
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2/ Well, most married people will not have the answer to this but if If you are single, you manage your expenses by yourself, they are yours to accommodate. Whether it is rent, food, transport, school fees, entertainment etc.
3/ You have a better grip on what it actually takes to sustain you than somebody who is married.
For many couples, it’s about splitting the bills. School fees, rent or the mortgage may be paid by one party while the other person handles the household bills…
It’s a good time to revisit the topic of budgeting given the recent increase in fuel prices. This will not just affect our transport costs but will translate to other areas like electricity, food etc.
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2/ We need to go back to the basics and look at our expenses so that we don’t get surprised.
How can you stretch that shilling?
a) Have a budget in the first place.
When you don’t plan your spending in advance, you are really groping in the dark.
3/ We avoid looking at the numbers hoping something somewhere will fall into place. A budget makes you aware. If you have no idea how much you spend on things, track your expenses for a month and you will come up with a pretty good idea.
1/ What Stopped You From Achieving Your Goals This Year?
We are less than three months away from the new year. Chances are that we will once again start the whole new year resolutions conversation. Are you tired of saying the same thing year in year out?
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2/ Aspiring for change and finding yourself in the same spot? You may be feeling that you haven’t moved. Maybe before setting these goals once again we can first evaluate what has stopped us from making progress.
3/ There is really no point of planning out another journey if you know your car won’t start. Resolve the issues with the car, then you have a chance of going somewhere.
Do you wish you had learnt how to handle money earlier? Maybe it is our children who will not have to lament about that. The earlier the better.
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2/ We run financial literacy programs for kids and many parents have asked us what they can consistently do with their children at whatever age to instill the right principles. Here are five things that can get you started.
3/ a) Let them earn it.
The mistake many parents are making is giving their children money without making them work for it. There are some children that are given the kind of money that could be somebody’s salary.
Planning your money is not a choice. I have worked in a money related industry all my life but planning for a large part of it was never a priority. The pressure to think ahead was just not there.
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2/ You earn, you spend and the next pay day comes around. There is this illusion of continuity and then something happens. This is what wakes up many of us. For me, I went into business blind and discovered what it meant to not have that consistent salary.
3/ The meals in the restaurant I ate without a care in the world, was now something I could not do. When I did, it had to be really thought through.
Other people lose their jobs and they suddenly have to itemize their financial resources until plan B comes along.