If you struggle with sticking to your budget or managing your money,
Here are a few things you can try:
Here are a few things you can try:
1/ Have two bank accounts.
One is for receiving money and the other is for holding money to cater for your expenses.
This works best for people who are paid or receive money several times in a given month.
It helps avoid the thinking that you have a lot of money to spend.
One is for receiving money and the other is for holding money to cater for your expenses.
This works best for people who are paid or receive money several times in a given month.
It helps avoid the thinking that you have a lot of money to spend.
2/ Create a budget and have a set limit of expenditure.
That means you cannot spend beyond a certain amount every month(unless emergencies occur)
If you monthly expenditure limit is capped at let's say 20K, move 20K only to your expenses account.
That means you cannot spend beyond a certain amount every month(unless emergencies occur)
If you monthly expenditure limit is capped at let's say 20K, move 20K only to your expenses account.
Spend that money in your expenses account as your budget says.
You can only replenish the account at the end of the month or when an emergency occurs
You will need the discipline to avoid pooling money from your other account when you spend all the cash in your expenses account
You can only replenish the account at the end of the month or when an emergency occurs
You will need the discipline to avoid pooling money from your other account when you spend all the cash in your expenses account
3/ Avoid Saving rules and saving challenges.
Budgeting rules like save 10% of your income assume that our expenses and income are static.
However, our incomes and expenses keep on changing.
Hence sticking with a static rule will mean that you are over saving or under saving.
Budgeting rules like save 10% of your income assume that our expenses and income are static.
However, our incomes and expenses keep on changing.
Hence sticking with a static rule will mean that you are over saving or under saving.
Saving challenges like save 1K every day or month won't last for long.
Soon you may not be able to save the 1K and that will mean abandoning your entire savings plan.
That's why the best saving advice is save what you can every time.
Soon you may not be able to save the 1K and that will mean abandoning your entire savings plan.
That's why the best saving advice is save what you can every time.
4/ Track your expenses.
You don't have to record all your expenses.
But you should have estimates of how much you spend on various items like food, transport, fuel, clothes.
This will help you know where your money goes and help you in budgeting better.
You don't have to record all your expenses.
But you should have estimates of how much you spend on various items like food, transport, fuel, clothes.
This will help you know where your money goes and help you in budgeting better.
5/ Create an emergency fund.
We often neglect our budgets when emergencies happen.
We even end up taking emergency loans.
An emergency fund will help you tackle emergencies without taking emergency loans or going out of your budget.
We often neglect our budgets when emergencies happen.
We even end up taking emergency loans.
An emergency fund will help you tackle emergencies without taking emergency loans or going out of your budget.
6/ Create a sinking fund.
To take care of lifestyle creep, it's best to save for any lifestyle upgrades and spread them over time.
Otherwise, you will always blow up your budget and end up with little or no savings and investments.
To take care of lifestyle creep, it's best to save for any lifestyle upgrades and spread them over time.
Otherwise, you will always blow up your budget and end up with little or no savings and investments.
A sinking fund helps you save for upcoming short term expenses like lifestyle upgrades, holidays, weddings.
To learn more about emergency funds and sinking funds:
See this thread below:
To learn more about emergency funds and sinking funds:
See this thread below:
7/ Have a fun/experiences portfolio.
This is the only shot you have at using money to buy happiness.
Have a list or a bucket list of things that you enjoy doing and save for them.
Whether it's travelling, charity, golf or anything else.
This is the only shot you have at using money to buy happiness.
Have a list or a bucket list of things that you enjoy doing and save for them.
Whether it's travelling, charity, golf or anything else.
8/ You'll break the rules once in a while.
Life gets messier and we are human beings.
You will find yourself overspending or impulse buying and that's okay.
Life gets messier and we are human beings.
You will find yourself overspending or impulse buying and that's okay.
Even with all these efforts, sticking to a budget may still be hard because the reality is usually messier than spreadsheets.
We are human beings and often our emotions will lead us to making poor decisions including financial ones.
To counteract these, here are a few measures:
We are human beings and often our emotions will lead us to making poor decisions including financial ones.
To counteract these, here are a few measures:
1/ Have a "no spend month" challenge.
This means that for a certain month in a year, you only meet your basic necessities and nothing more.
You save and invest the difference.
This will help you correct months where you overspent and went out of your budget.
This means that for a certain month in a year, you only meet your basic necessities and nothing more.
You save and invest the difference.
This will help you correct months where you overspent and went out of your budget.
2/ Guilt free spending
Sometimes we feel guilty when we spend huge amounts of money on lifestyle upgrades.
We think that we should be saving or investing that money instead.
To remove the guilt, for any big expense, save/invest an equivalent amount
Sometimes we feel guilty when we spend huge amounts of money on lifestyle upgrades.
We think that we should be saving or investing that money instead.
To remove the guilt, for any big expense, save/invest an equivalent amount
That's it on budgeting.
Playing a strong defense i.e. checking on your expenses and being frugal will help you improve your financial position.
More so if you have a poor offense(you are having trouble increasing your income)
Playing a strong defense i.e. checking on your expenses and being frugal will help you improve your financial position.
More so if you have a poor offense(you are having trouble increasing your income)
If you enjoyed this thread:
1/ Follow me @kahome_steve for more amazing threads.
2/ Retweet the first tweet so that others can see it.
1/ Follow me @kahome_steve for more amazing threads.
2/ Retweet the first tweet so that others can see it.
P.S
I have an e-book that has everything you need to know about SACCOs, MMFs, T-Bills & T-Bonds.
Get it in the link below or DM for Mpesa option.
gichukikahome.gumroad.com
I have an e-book that has everything you need to know about SACCOs, MMFs, T-Bills & T-Bonds.
Get it in the link below or DM for Mpesa option.
gichukikahome.gumroad.com
TL;DR
1/ Create a budget and have an expenditure limit.
2/ Have two bank accounts
3/ Have an emergency fund
4/ Have a sinking fund
5/ Have an experiences/fun portfolio
6/ You'll often break the rules and it's okay
1/ Create a budget and have an expenditure limit.
2/ Have two bank accounts
3/ Have an emergency fund
4/ Have a sinking fund
5/ Have an experiences/fun portfolio
6/ You'll often break the rules and it's okay
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