January is almost over and there’s still 11 more months to make money (and hopefully save a significant portion of it too). There are a lot of articles out there on the internet that give tips about saving money and I’ll be chiming in with my two cents here. The 52 week saving challenge is something that I have seen popping up on local news and blogs and I recommend you checking it out – even though it’s not a strategy I personally follow.
The following list of tips to saving money may include suggestions that you have heard before while a few may be a little left-field. However, I think the tips below can be useful for a majority of people. DISCLAIMER: I am not a financial adviser and I don’t pretend to be. I’m just sharing my personal tips on saving money and if these tips help you, then that’s great BUT everyone has their own circumstances and some of these tips may not apply. Just think carefully before blindly following anyone’s advice on the Internet; the WWW is not always filled with useful information e.g. The Onion “News” site.
- Review your insurance. This goes for everything from health insurance to car and home owner’s insurance. Selecting the right insurance for your needs is a topic on its own but nonetheless here is my take on the matter. You CAN and SHOULD shop around for the best insurance that suits your needs at a price that doesn’t hurt your pockets in the process. One thing to note is that you should strive to get the highest coverage for the money you will be paying. For example, if Company A covers your in-patient medical bills for up to 1 Million and Company B for 2 Million for the same premium you will be paying, I’d want to go for Company B even if they charge me a little more. There are plenty of online options to check out if you’re looking to compare quotations and some of these websites include Next Insurance, Insure Afrika, and Cheki.
PLEASE NOTE: If you are thinking of changing your insurance you need be aware of all the terms and conditions before switching. A very significant term that I’ve come across in the area of health insurance that if you are not aware of may hurt you is the term ‘waiting period’. This is the period of time where you cannot enjoy the benefits of your coverage from the date you paid for the policy. usually 6 months or even 12 months depending on the Insurance company.
- Not having ANY insurance or too little of it. Not to be confused with the first point, you NEED to have insurance. In Kenya if you have a car, you are legally required to have some form of insurance for it. The same should go for YOU! Insurance is something we don’t want to have to use but it’s nice knowing you have that safety net and that you don’t need to take out a loan to cover an expensive medical bill or fix your car after an accident. If you are the breadwinner in your family, you need to plan for a scenario where you are not able to provide for them and how your family will survive. Financial instruments like disability and life insurance have cheaper premiums when you are younger so take advantage of this time while you still can.
My favorite Kenyan organization when it comes to everything personal finance is Centonomy. They have a number of classes and events throughout the year about different topics including how you can use insurance as an investment and I would definitely recommend checking out their YouTube channel to start with. I recommend watching their videos and I am especially fond of this one: Paying Yourself First presented by Stanley Ngugi, he’s awesome!
- Track ALL your expenses. This is a simple concept and with all the apps on smartphones, everyone should be doing it. But honestly, how many of us track every single item that we spend money on? I know for a fact that I do. I do it to a point where it borders on levels that may be considered absurd. The funny thing I find about this habit is that I don’t think about the money I am spending (at first), I usually think about having to add it on my excel sheet at the end of the day and whether that purchase it worth the entry or not. Once you know where your money is going, whether or not you have a budget, your spending will automatically start going in line with your goals and you’ll spend less frivolously.
- Forget about mobile loans to cover for your lunch. This is not limited to just lunches but anything that you could easily pay cash for whether its food, clothes or a cab ride, just DON’T do it! The minute increase in your savings limit and high interest charges (which are over 5% monthly) are definitely NOT worth it. Loans and building a credit history are important but using them to pay for your daily expenses are bad uses for them.
- Wait a week before MAJOR purchases. Now this depends on the individual, for some of us, spending KES 50,000 on a new flat screen TV to watch Netflix and football games at home might not be a major purchase and for others spending KES 20,000 on a new fridge might be and depends on your individual financial situation so be mindful. With the advent of the Internet and mobile phones it’s very easy to shop around for the best price (and a place that honors their warranties, in case “something happens”). After identifying what you want to buy and perhaps even the specific item, wait a week and spend that time trying to get a better deal in the time you have available and you never know you might save 10 or even 20% off that purchase.
Last year, I wanted to get a new TV and I looked around for a 32 inch TV from a Chinese brand and it was priced at KES 18,000. I waited a week and during that time I walked around my area and asked for prices before someone suggested I look up prices on Jumia and lo and behold, I got it at KES 14,000 with delivery. Thanks, Jumia!
These are just some of my thoughts and I hope you enjoyed reading the article and thought they might be useful but if you don’t, I will be thrilled to hear from you (no, seriously I will be) about why you think that. If you have some of your personal tips that I haven’t mentioned on how to save more in 2019, please comment and share your thoughts below. Good luck for the rest of the year!