5 Ways to Manage Your Money


Earning a decent salary, but still running out of cash before the end of the month? Financial expert S. Ngigi looks at some simple ways to stretch your budget.

Lately, I have been asked by my male colleagues why they seem to have no money at the middle of the month. Some are very well to do, with six-figure incomes, living life in the fast lane. My answer always looks at the spending part of the equation. It is harder to justify a 25 per cent salary increase but not as hard to reduce spending by 25 and even 30 per cent.

In this article, I will summarise the ways in which an ordinary middle-income Kenyan man can easily save up to 25 per cent by reduced spending, without compromising the quality of life.

Drip. Drip. Drip. That sound coming from your bathroom isn’t just annoying – it’s also costing you a fortune. A leaky faucet can waste as much as 25,000 litres of water a year, needlessly running up your water bill. An even bigger drain on your finances is bad money management. When it comes to monthly expenses, it can be difficult to identify financial leaks, but just like those tiny drops of water, pennies at a time can add up to an ocean of lost cash.

Review Your Data Plan

According to wireless analysts, the average smartphone owner uses just 256MB of data per month, but many people pay for plans 10GB or larger. Review your monthly usage to see if you could save by switching to a cheaper plan. You may be able to save upwards of KShs3,000 a year with a plan that better meets your needs. If you’re concerned about over-usage charges, you can install an app to track data usage in real-time.

Check Your Auto Insurance Policy

It is a well-known fact that your fancy Q7 or S500 depreciates every year. In Kenya, it is advisable to have your car valued at the end of each insurance cycle. Most auto insurance policyholders renew their plan with their current company each year without investigating the competition.  Family needs change each year and switching plans (or making changes to the one you already have) could substantially reduce your insurance bill.

If you don’t have time to do the research, an independent auto insurance agency can do the legwork. They don’t benefit from selling insurance from any one particular company, so you can count on an unbiased opinion.

Lose Your Home Telephone

If you have a reliable internet connection and at least one cell phone in your home, you can save big by eliminating your traditional landline service.  Try a product that connects a landline to your personal computer via USB, so you can still have the comfort of speaking on a telephone without shelling out the big bucks. Skype is also a convenient (and for most calls, free) alternative to a landline.

Make A Shopping List

Middle-class Kenyan families throw out an incredible 25 per cent of the food and beverages they buy each year, despite the chronic income disparities.  Considering that the average family of four spends more than KShs75,000 each month on groceries, that’s a lot of money down the drain. You can prevent buying if you create a family menu and write a shopping list before you hit the supermarket.  Once dinner is over, freeze your leftovers for future enjoyment.

Stop Paying Interest

Make it a priority to stop using your credit cards and to pay them off as quickly as possible.  When you are not paying interest, you can begin investing your money and start earning interest.  One of the best ways to save is to avoid going into debt.

Final Thoughts

Fixing money leaks isn’t rocket science, but it does require research, discipline, and attention to detail. You can always find new ways to reign in your spending.  Make a few phone calls, conduct your own research on the internet, and push yourself to change those pricier personal habits. Unless you tighten the spigot and fix the leaks, you could find yourself in hot water.

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