How to Save

Benjamin Franklin said a penny saved is a penny earned.
Many times the most challenging thing about saving money is getting started. It can be challenging to figure out simple ways to save money and use your savings to pursue your financial goals. Below are few tips to help get you started;
1. Record your regular expenses
The starting point is to understand how much you spend daily, weekly and monthly. Keep track of all your expenses-meaning every coffee, newspaper and snack you buy. Once you have your facts, organize the numbers by categories, such as gas, groceries and mortgage, and total each amount. If you use your mobile phone to pay for these services, it is easier to get statements and messages that will help you break down your spending.
2. Create a spending forecast
Once you know how much you spend in a month, begin to organize your recorded expenses into a workable budget. Your budget should outline how your costs measure up to your income—so you can plan on spending while limiting overspending. In your monthly expenses, be sure to consider the expenses that occur regularly but not every month, such as car maintenance and vehicle insurance cover.

3. Plan to save first
Your budget should include a savings category within it. The biggest mistake is to save last because money is a scarce resource that is hardly enough for all your financial needs, so pay yourself first by putting aside at least 10–15 per cent of your income as savings in an account. Cut back if your expenses are so high that you can’t save that much. Consider savings as a regular payment, similar to groceries, house rent and utility bills.

4. Establish a savings goal
One of the best ways to accumulate savings money is to set a goal. Start by thinking of what you might want to save for, anything from a house down payment to a vacation—then figure out how long it might take you to save for it. For instance, if your child requires Ksh 20,000 every term for school fees, keeping Ksh 7,000 per month as savings will help you meet this need without necessarily seeking a credit facility.

5. Make saving regular and automatic
It is almost humanly impossible to take cash to the Sacco or bank to save when you have a pressing need-that is why it is advisable to establish check-offs and standing orders. For instance, your employer can deduct specific amounts every month into your savings account if you are in employment. Business people, farmers or salaried people can write to the Sacco or bank on how much to transfer and at what intervals into their savings account. Feel free to contact us on 0729333444 for guidance on this. Automated transfers, which are systems-based, are a great way to save money since you don’t have to think about it. Automatic transfers generally reduce the temptation to spend money.
Quote of the month;
“Saving requires us not to get things now so that we can get bigger ones later.” — Jean Chatzky.

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