Rédaction Africa Links 24 with Daily Nation
Published on 2024-02-17 12:41:23
, food, entertainment, and miscellaneous expenses. This practice will depict where you are using more money than necessary and prompt you to make necessary adjustments. For example, you may realise that you are spending more on entertainment and miscellaneous expenses which could be a result of poor planning and impulse buying. As the adage goes, “a penny saved is a penny earned”, you’ll be able to make reasonable savings from your daily expenses. Following these two strategies will enable you to identify your sources of financial bleeding and areas where you could make uncompromising cuts. Embrace frugality and contentment: The new salary means a pay cut of Sh25,000 compared to the former job. In scaling down your expenses to match your new earnings, you should appreciate the frugal life. If you can manage to live comfortably with 20 per cent of your income, scrutinize your budget and expand all expenses by 20 per cent and not the occasional spikes from increase in utility bills and purchase of household items. Expert money managers contend that lowering your standard of living is a better option than borrowing and or dipping into the Savings and Credit Cooperative Organisations or money market funds for recurrent spending. Frugality is key in building a significant retirement corpus and equipping you with the financial muscle to withstand emergencies. Married couples in the low and middle income bracket are encouraged to live off one income source and use the other, be it a spouse’s salary or from side ventures, for making investments, savings, insurance premiums and paying school fees and mortgages. This way, your family will not face financial stress from the sudden loss of employment or medical emergency as most people, who use all their income and live on debts, undergo. With these strategies at your command, you are ready to take on the world of personal finance and wealth creation. The key is to be disciplined and consistent in your efforts. With time, you will not only clear your debts but also secure your financial future. Remember, financial freedom is not a dream, it is a journey that requires patience, diligence and a willingness to make sacrifices in the short term for long term gain.
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