Living Smart

Living Smart

<strong>Do you live smart?</strong>

Many of our financial issues arise because of our lifestyles.  We live, eat and exist in a certain way, which then translates into spending in a certain way. When we are not intentional about our spending, it can get out of control. People do not like addressing the question of spending because they assume it will be about sacrifice, restriction, telling you what you can’t do and so on.  Whilst to achieve anything you will need to make some sacrifices, the end game is to actually enable you to get what you want.  To meet your goals. There is a lot of talk about working smart but we also need to live smart on a day-to-day basis.

Sometimes we are simply guilty of living very unsmart lifestyles. If we want to improve our finances, achieve our goals and really do the things that we actually value, we have to change the way we handle our day-to-day lives.  So how can you be smarter? As much as this article is mainly geared towards our spending, we first need to understand that living smart requires you to live under what you can afford.(Click to Tweet this thought)   If you can afford to live on Kshs 100, 000, live on Kshs 70, 000. Do not live at your level (At Ksh.100,000). All your expenses must always be lower than what comes in.  A smart way to do this is to remove allocations for savings and investments before you start spending any money.

You have many bills to pay. There are main ones such as rent, electricity, cable, credit cards, house helps etc.  In addition, there could be other suppliers who keep your life running. This could be taxi’s, boda boda’s or people from whom you get your vegetables, meat, clothes etc. If you notice at the end of the month, the supermarkets are normally full.  People have been paid and are doing their main monthly shopping. That is usually one expense and activity we want to get out of the way quickly. One way of being smart with expenses is to try and do the same thing we do when shopping for food. Pay them (or at least majority of them) at the same time.  We get into a lot of problems when one payment is on the 30th, the next on the 10th, the other on the 15th and so on.  You see, between the 30th and 10th we are very likely to be tempted because money is sitting in the account. As we go about our day to day we are very likely to conveniently forget the bills that have not yet been paid.  We can easily be sidetracked by some glossy looking item. When you get paid, pay your bills together.  (Click to Tweet this thought) Take the hit at one go. This will stop you from lying to yourself that you still have a lot of money. The bills may not all fall due at the same time.  Rent may not fall due at the same time with the electricity company bills but pay ahead if need be to be able to use the same timing. You will avoid problems that arise from spending money that you did not actually have (because they were due to different people in different periods). Try and put the the other suppliers in your life on this monthly scheme as well.  If you have been using the same taxi for a while they are likely to agree to be paid monthly or at the very least bi monthly. It is also much more efficient for you in terms of transaction charges.

This may sound analogue and outdated but people used to spend less money when they had to go to an ATM to withdraw cash. Now with mobile money and cards we are simply not putting limits to the amount of money we are spending. Money has been made too accessible so we have to be smart about the accessibility we give ourselves. Try planning your day to day spending for a week and withdrawing only that amount of money you have decided to spend. Remember this is still after you have paid bills and suppliers in your life.  Refrain from removing any more.  You will not die. I have a friend who has a separate line for mobile money transactions for this reason. She does the transactions she needs to do and then leaves that phone at home.  Her normal line has not been enabled for mobile money to avoid pulling funds from her account on a whim as she goes about her day. The other thing this does is that it makes you intentional about your spending because you have to think about it.

Lastly, be smart about when and how you shop. In the course of the year what do you intend to buy. It may even be a place you want to go to.  So for normal shopping like food you can be smarter about where you buy things.  Some things are significantly cheaper wholesale or in markets. But there are also big items you may want to buy. A new fridge, furniture, car etc.  Start looking now and putting aside money now and maybe time periods when the shops are getting rid of older stuff. Be smart and spend time looking around. There are people leaving the country who are selling things at a throw away price. We pay hefty premiums to get things quickly and immediately we want them. If it’s a trip or holiday you are after this year, try and go in the low seasons. If you start making payments early you can get bargains. You put in a lot of effort to earn your money, you might as well get the most out of every Shilling.(Click to Tweet this thought)

Waceke runs a program on Personal Financial Management & Wealth Creation. To sign up, email her at waceken@centonomy.com| Facebook/centonomy | Twitter @CekeNduati|or go to www.centonomy.com

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