Money comes, money goes! Jipange on how to budget
Every time we get some cash, we spend most of it without a plan. Yout tuko na hiyo problem. We’ll use it on our most immediate needs and then later realize we don’t have any more left. It’s always as though money ain’t our friend. We lose it too quickly. The problem might be that you just don’t know how to budget. Here are simple rules you can follow.
The 50-20-30 rule
- 50% of your income goes to basics, that is, food, rent, tranport, electricity (wasee wa tokens) and such.
- 20% goes to your financial plan. This includes a retirement plan, investments, savings, clearing any debts, emergency money.
- 30% is fun money. Pizza, clubbing, movies, travelling, expensive clothes. This is basically the money you are allowed to spend on anything you’d want.
The 10% rule
If you want to teach yourself how to save, here is a rule you can follow. For every income you get, save 10% of it. It doesn’t matter where the money is from, a sponsor, a side hustle, a gig, an economic injection from a relative, HELB even. Just make sure to set aside 10% of the money to save.
The 1 year rule
You can also save money for 6 months to a year to buy something. In this rule, you need to determine what you want to buy and calculate how much money you’ll need every month in order to get there. This rule will teach you a lot of discipline and you’ll buy what you want.
Always shop with a list
Yes, always. Whenever you go out, make sure you have a shopping list of what you want to buy. This way you keep a record of your spending habits.
Track your spending in a day, week
The easiest and quickest way to budget is to track your spending. In a day, calculate how much you’ve spent. Every coin. Be honest with yourself. Within a week, sum up the money and you’ll be surprised. Then find ways to cut down on unneccessary things.