How To Crush Your Budget

Financial planning is evaluating your current financial status, where you are, and where you want to be.

Financial Planning gives you control of your income, expenses and investments. It involves identifying your goals, creating a budget based on them, and investing as directed by your financial goals.

Let’s talk about how values affect your budget and spending plan.

Research shows that millennials and Gen Z spend their money on the top four things: housing, transport

(cars, Uber, taxis), eating out, and gadgets. What would you say you spend most of your money on? If you continue with that spending trend and pattern, will you be able to reach your financial goal?

For example, you plan to retire in the next 25 years and have decided to save KES 15,000 per month towards that goal. However, you spend the same amount on transport and eating out monthly. Are you willing to let your retirement goal lag and suffer because you have placed a higher value on eating out and convenience? This assessment will help you bring a balance to your spending.
Other tips to help you stick to your budget are:

✅ Refer to it as a spending plan instead of a budget. A budget tends to feel restrictive.

✅ Be flexible. Budgets change, and you need to be able to adjust and make changes as circumstances change.

✅ Be realistic. Expense tracking helps you know the actual situation on the ground, thus allowing you to be more realistic

✅ Have financial goals. Financial goals help you focus. Knowing what you are working towards enables you to be disciplined

✅ Keep records. Have a visual image of how your expenses are coming in and going out.

✅ Pay Cash: This helps you wire your brain that you are actually spending money. You will be more conscious that money is going out.

✅ Shop with a list. If you don’t have one, you will end up spending carelessly.

Is it possible to create a budget on a small or fluctuating income? Yes! These tips can help you achieve just that:

✅ Be friends with your calendar.

✅ Know your monthly average income.

✅ Know your baseline (bare-bones budget.)

✅ Increase your income.

✅ Pay yourself a salary for a fluctuating income.

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