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What is Money and How do I Manage it Better?

Welcome to the first series of blogs by Professor Ndovu. I am on a mission to demystify money matters so that our money works for us instead of us working for it.

What is money?

At its most simple, money is a medium of exchange in the form of coins and banknotes. It is a tool that allows us to pay for goods and services that we want.

Money doesn’t come easy, and being good with it is about more than just making ends meet. Life is much easier when you have good financial skills. If you’re struggling with money management issues such a living paycheck to paycheck despite making more than enough money, then here are some tips to improve your financial habits.

How To Manage Your Money Better

  1. Have a Budget: Create a budget by listing out your monthly expenses, adding up numbers, and making sure you spend less than you earn.

  2. Using the Budget: Refer to your budget often to help guide your spending decisions. Update it as you pay bills. At any given time during the month, you should have an idea how much you’re able to spend, considering any expenses you have left to pay.

  3. Give Yourself a Limit for Unbudgeted Spending: If you have any money left over, you can use it for fun and entertainment, but only up to a certain amount. Before you make any big purchases, make sure it won’t interfere with anything else you have planned.

  4. Track Your Spending: Small purchases add up, and before you know it, you’ve overspent your budget. Start tracking your spending to discover places where you can save. Do this by saving your receipts and writing your purchases in a spending journal, categorizing them so you can identify areas where you have a hard time keeping your spending in check.

  5. Make Sure You’re Paying the Best Prices: You can make the most of your money comparison shopping, ensuring that you’re paying the lowest prices for products and services. Look for discounts, coupons, and cheaper alternatives whenever you can.

  6. Save Up for Big Purchases: The ability to delay gratification helps you be better with money. When you put off large purchases, you give yourself time to evaluate whether the purchase is necessary.

  7. Limit Your Credit Card Purchases: Credit cards are a bad spender’s worst enemy. Resist the urge to use your credit cards for purchases you don’t need.

  8. Save Regularly: Pay yourself first, by depositing money into a savings account. This will help you build healthy financial habits. You can set it up an automatic transfer from your checking account to your savings account.

  9. Being Good With Money Takes Practice:​ Practice makes perfect. The more you make these habits part of your daily life, the easier it is to manage your money, and the better off your finances will be.

What do you think of these money management tips? Do you have any tips of your own to add? Please mention them in the comment box below and we will include them.

Interested in learning more about saving and investing?

Read more from our learning centre Ndovu Academy, Follow us on our social media and join our WhatsApp and Telegram communities.

Ndovu is an online platform owned and run by Waanzilishi Capital Limited, an investment adviser licensed by the Capital Markets Authority of Kenya.

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