By Ruoro Kairu
As a millennial, I have to often admit I see the world differently from other generations. The generations ahead of me always appear to be serious with their ‘got everything figured out’ demeanor. My generation, on the other hand, is on the sweet spot of figuring things out while still keeping up with some of the more relevant lifestyle trends.
Personally, one field where I have failed miserably and am in the process of figuring out is how to manage my money.
As I was growing up, we didn’t talk much about money. Every attempt to discuss money matters would be shot down by the same harsh-toned phrase ‘We don’t have enough money to do that.’
I got my first job when I was 17 years, and I still can’t account what I did with most of my wages.
Eventually, it dawned on me that I was losing every shilling I was making. Money in, money out was my system. I had to create a strategy else I would have nothing to my name when I retired.
Here are some key lessons on money management I have picked up along the way.
1. Making a budget
Initially, when I would receive my salary, I’d pay rent, utilities, and keep a fair amount aside for transport. I still had a few coins left in my account, and I would never know how they were depleted.
Well, perhaps I had an idea of what happened –takeaway food, airtime, and a few other haphazard spending routines.
I had to come up with a way of saving some money. So I decided to create a budget.
My budget was pretty basic, I had essential must-have bills – utility, rent, transport, food. And non-essentials that would be nice to have.
The first few months of adjusting are tough. You stop buying chips and chicken for supper and plan on cooking some ugali and cabbage. However, as time progresses, you adjust accordingly and forget the taste of fries.
2. Paying my debts
Today, there are innumerable borrowing platforms and applications out there. You rarely go a few hours without coming across an ad promoting a mobile lending service.
Whenever I run out of cash in my late teen years, I would turn to one of these money lending apps. There’s this gloomy feeling you get when your salary comes in and you know debts are waiting, with interest!
I had to stop this borrowing habit.
I deleted all the platforms I had downloaded and adhered to my budget.
At this point, I started noticing my bank account was not reading zero in the middle of the month.
3.Building an emergency fund
Many people have gotten accustomed to their salaries and they fail to plan for an emergency. Though few will truly admit, rarely do we plan for a rainy day.
Emergencies are a given for everybody. You need to plan for unseen circumstances such as termination of employment or illness.
I recommend looking at your monthly expenditure, then saving up four to six times that amount.
With an emergency fund, you’ll have something to break your fall should the unforeseen happen.
Saving up for an emergency fund will take discipline and you will have to keep away from that money until the point when you need it. Remember, an emergency fund is not the same as savings you’ve made. The two should exist independently.
Quick read >>> The 10 Commandments Of personal Finances.
I may not have had these principles instilled when growing up, but I have come to see their importance. I have to admit I sometimes throw caution to the wind and enjoy a bit of life at the moment. But always remember your long-term goals. With these tips, you are bound to improve your personal finances by killing off your debts, increasing your savings, and improving on your spending habits.