We all want to save money so we can realize our goals and desires in life and find some sense of fulfillment. When it comes to saving money many people struggle with creating sizeable realistic financial goals. This is one of the many reasons behind failed financial goals. It is important to think about realistic goals and saving strategies and make them part of your budget in order to be successful in your financial journey. Here at Ndovu, we walk with you throughout your financial journey helping you define your financial goals and craft a winning strategy with our goal-based saving approach. We help you build a customized portfolio to grow your wealth and achieve your goals.
10 simple money saving tips
1. Set clear financial goals.
The first step to take is setting clear financial goals. Whether you aim to start a business, plan for retirement, or plan for your child's education, having specific financial goals will give you a clear sense of direction. Use the SMART approach(Specific, Measurable, Achievable, Relevant, and Time-bound) when defining your goals and break them down into smaller manageable milestones.
2. Create a budget.
Creating a budget is an effective way of managing your finances to work towards your financial goals. List all your sources of income and categorize your expenses into essential costs and non-essential costs. Always review your budget regularly and adjust it as needed to stay on track. You can make use of free budgeting tools like Goodbudget to create and manage your budgets.
3. Track your spending.
Keeping an eye on your spending helps you identify where your money goes and areas where you can cut back on spending. Keeping a record of every purchase you make and reviewing your habits at the end of each month will show you all the unnecessary expenses you can eliminate or reduce.
4. Save before you spend. Â
One effective saving strategy you should take up is paying yourself first. What this means is before you spend on anything, set aside a portion of your income for saving. You can automate this process by creating a standing order to transfer a fixed amount to your savings each month. This will ensure you stay consistent in your saving goals.Â
5. Use mobile money services wisely.Â
In Kenya, mobile money services such as M-pesa are widely used for transactions. As much as these services make transactions much more convenient they can lead to overspending if not managed well. There is no problem with embracing technology to make our lives more convenient but it is imperative to do so mindfully. If you struggle with spending money recklessly when it comes to mobile money services, consider withdrawing some cash from time to time for your expenses.
6. Take advantage of savings and investment accounts.
Several financial institutions in Kenya offer saving accounts with competitive interest rates that can serve your financial goals. All you need to do is clearly define your goals so as to easily identify which savings accounts align with your goals. Additionally, you can also consider investment options such as the Ndovu money market funds or SACCOS to provide better returns on your savings.
7. Plan for emergencies.
If you're not so big on saving and you would rather invest the bulk of your money, keep in mind it is always recommended to have an emergency fund in case of unexpected events. Aim to save at least three to six months of living expenses to prevent you from eating into your long-term savings and potentially going into debt.
8. Shop smart.
Taking advantage of discounts, loyalty programs, and coupons or strategically picking out shopping outlets to shop at has a big impact on your expenditure. Just try it out for the next three months and monitor your expenditure. You'll be shocked at how much you could save!
9. Avoid debt.
High-interest debt like credit cards or personal loans are enemy number one when it comes to saving because they can easily derail your saving goals. It’s always a good practice to avoid taking unnecessary debt and if you have an existing debt prioritize paying it off.
10. Educate yourself.
To manage your money effectively you need to be financially literate. Take time to familiarize yourself with financial concepts such as budgeting, investing, and interest rates to help you make informed financial decisions. Check out the Ndovu Academy, a knowledge center created by Ndovu to help create financial literacy in Africa to empower all kinds of investors to achieve their financial goals. You’ll find loads of information at the Ndovu Academy to help you along your financial journey.
Saving money requires discipline, planning, and commitment to making smart financial decisions. Whether you are saving for an emergency fund, higher education, or a vacation these tips will help you save money and achieve your aspirations.
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