It's not how much money you make, but how much you keep

1. Learn what you are entitled to legally

When my children were younger, I moved to Kikuyu, next to Musa Gitau Primary school. This was because it is a well-performing government school. And I wouldn’t need to pay high amounts that I would pay in academies.  Did you know that you can get free medical services, free maternity and free education?

Utilising free government provisions saves you a lot of money.  For medical services, identify a good government hospital that has those provisions. 

NHIF now covers a lot of expensive procedures like dialysis and overseas treatment. If you suddenly fall sick and you are not on NHIF scheme, you will spend a lot of your savings on things that the government has already catered for. Make sure you understand how the government operates.

2.  Choose something to save for

If you are aiming at nothing, chances of taking out the little savings you have and spending it is very high.

You must tell yourself, “I am saving money for this.” Always have the mindset that saving for something requires sacrifice. You must sacrifice today’s comfort for whatever you are saving for, and understand that it takes time.

Don’t think that you will start saving today and everything will be okay in a year or two. Have something to pay for, give yourself time and bear the pain for now.

 3. Join a chama or a savings group

Organisations like Faulu Kenya bring people of low income together and create groups so that they are able to pool together. There are many benefits to doing this. You might want a bank or Sacco loan but not get willing guarantors.  But when you are in a savings group and you have a common agenda, you can co-guarantee each other when it comes to borrowing. In such groups, you grow together and understand each other.

You enjoy the power of borrowing, because at the end of the day, borrowing will always be part and parcel of your financial growth. There is also a lot of financial education within savings groups. Organisations such as Musoni and Faulu Kenya always look for trainers regularly, say, every Tuesday, for their members. Joining these groups grows your confidence. The whole idea in money management is down to having the right attitude.

4. Make your savings moderately inaccessible

Automate your savings. And every year, save more than you saved the previous year. Make the money you are saving difficult to access. Look for a bank that has no branch near where you are. Do not install the money transfer apps and don’t get an ATM card, so that you can make sure that the only way to access your money is by queuing in the bank.

5. Track your expenses

Always work with a budget. However, even more important is how you track your expenses. If you had made a budget, track your expenses.

Always have a book where you write how much you spend daily, and on what. That is the only way you will track unnecessary expenditures and practice conscious spending. You will see that you bought a soda, but ask yourself if you were really thirsty.

A soda may be sh50 but thrice in a week, it’s sh150. In a month, it’s sh600. In a year, it is Sh7,200. In 10 years, it will be Sh72,000.

That is a very small luxury you could have easily ignored, that you will only realise if you track your expenditure. Sometimes you board Uber or matatu when you can walk. Also, be conscious on the amounts you spend on gifts.

6. Cut down on your biggest expenses

Whatever takes the largest chunk of your money, reduce it. Whether rent, schools or grooming, find a way to cut that down.

Commit yourself to giving up some of your luxuries. If your biggest expense is rent, you can downsize to a smaller house, move to a neighbourhood which is slightly cheaper or get a roommate to share the rent. Or find a way to get that house to make money for you.

For instance, if you have a compound and you have extra space like a garage or any extra other space, you can earn some income by renting it out. You can turn one corner into a single-room dwelling or a storage unit.

7. Start a side hustle

Consider what your hobbies, interests and skills are. Is there a possibility that you can get an income out of any of them?

If you are good at music, with a laptop you can become a small-time DJ at birthday parties and get a little extra cash.

You can go online and get some jobs or even sell second-hand clothes. You can decide what to do once you understand your SHAPE.

S- Spirituality: Within your spiritual gifts, gifts that you are born with or can develop, there is always something you can do, for instance composing songs that you can sell or perform at a fee.

H- Heart: What do you hold dear? What are your passions?

A – Abilities. What are you capable of doing?

P – Personality: You can make money based on who you are. For instance, if you are a talkative person, you can be a part-time insurance agent, part-time real estate agent or a broker of some kind.

E- Experiences: Your past can pave a way for something you can do. Identify a problem you went through and think of a way you can solve it for other people.

8. Pay attention to where you shop

Don’t just walk into big supermarkets or shops. Check where you reside. There are always shops that sell the same quality of goods at a lower price than what you find in other places. Identify such places.

If it is for items like furniture, clothing, electronics and other household goods, consider secondhand goods.

For example, when my son got a job in the judiciary, he went with Sh2,000 to Toi market and came back with clothes he could wear to court and nobody could tell they were second-hand. There are good quality second-hand goods.

9. Shop in bulk

Consider going to a wholesale shop. Things are cheaper there. If it is rice, buy a 25kg bag. It might cost you sh2,000, and if you do your math, you will find that you are buying a kg at Sh120 instead of the usual sh180 or Sh200.

If it is too much for you, pool with other people and share. I have observed the women in open air markets doing this so well.

When they finish selling, they get together, go to a shop and buy the 12kg bale of flour. They then divide it amongst themselves, which is cheaper. You can do this with almost all goods.