Putting money aside as a good habit to improve your financial well-being.

Much as we need money for almost everything, we ought to minimise expenditures in the most possible ways.

One unconscious expenditure, impulse purchase can slide you into bankruptcy. But the good news is, there is a way to evade all that.

We must handle money correctly to survive these tough economic times.

How best can you handle your finances?

You need to pull a couple of smart money moves to become financially savvy.

What habits then, must you enforce to improve your finances?

Normalize budgeting

Make budgeting your way of life. No expenditure is minor as money is still spent and lost.

This is where most make that mistake of assuming that minor expenditures don’t eat into your finances. Learn to strategically portion your money for different expenditures. Make it a habit to do this every month.

Budgeting will help you understand the position you are in financially and how best to go about it.

Budgeting helps you eliminate uncalled-for expenditures. Put your money to good use by budgeting.

After you’ve made your budget, stick to the rules to achieve results. Also, have the discipline of using your financial budget and make it a daily routine.

Keep in mind that you can always budget from the least expenses to the most ones. Leave out nothing. Whilst budgeting and watch your financial status improve.

Money recovered from surplus expenditure should go right to your savings or investments!

“Instead of focusing on the process of creating a budget, focus on the value that budgeting will bring to your life.”(the balance.com)

Clear your debt

Like an infinity symbol, debt brings you back to where you started- the beginning.

Clear your loans, especially those that incur the highest interest over time.

Some if not all loans incur surmountable interests when you take longer to clear them e.g credit cards. Clear your loans early to have peace of mind.

In the case of long term loans like mortgages, prioritize your finances such that you are left with the less accumulative ones. Strategize and come up with smart plans to clear your debt. Get a loan when you really must. That’s a good strategy.

Once you are clear of your debts, you can channel that money to your savings.

Alibaba Group CEO and business mogul, Jack Ma once stated, “We are never in lack of money. We lack people with dreams, who can die for those dreams.”

Consider interest- generating accounts

In Kenya, this has been made easy by the majority of financial institutions including telecom mobile money services and instant loan apps.

Interest- generating accounts are meant to assist individuals to save up some cash and withdraw it when the interest matures.

Of course, it is a patience related type of investment that requires time for the money to grow, but think about it!

No need for extra effort to invest in income-generating businesses. Just deposit a given amount of cash, wait for the interest to mature and earn your returns. At the same time, you are saving up your cash for bigger future investments. You should already be doing this.

M-Shwari and KCB M-Pesa are the most flexible mobile banking accounts with no deposit charges but with interest up to 6.65% p.a.

Open as many interest-generating accounts to maximise the revenue opportunities.

This way, you can save up some extra cash to start that business you’ve always been dreaming of.

Set financial goals

What do you want to financially achieve after a year? Buy a home, go on vacation, start a business?

Whatever goal you’ve set, it is achievable with the right mindset. Set aside time to create simple achievable goals and write them down. Have a vision board for visualization purposes.

Your financial goals should depict you as a frugal but not cheap spender. You should, therefore, start with baby steps that will help you achieve overall long term goals.

Incorporate timelines, deadlines and constant follow-ups on your financial progress.

With constant reminders, you can keep track and achieve long term financial goals.

Investing

Investing is one principal way to stabilize your finances. Investing is spending money to get more money.

It is one of the best ways to save for retirement or long term plans. You have to be strategic in how you choose to invest.

Since investments require huge sums of money, many Kenyans have opted to dive into Chamas, SACCOs and investment companies.

Such as Centum investments, Cytonn investments, Stima SACCO, and local Chamas. Most of these have invested in Nairobi’s Matatu transport system, real estate and housing etc.

Most of these investments started as local Chamas and have now flourished to worldwide economic giants. The secret is simple, set aside and invest.

Track your money

Technology has eased financial management to the extent of accessing banking services on mobile.

A couple of apps exist to assist you in managing your finances.

From mobile money savings and mobile money transfer, utility bill payments, to instant mobile loans, all at the click of a button.

Get digital assistance from apps like Mint budget tracker, M-Shwari mobile savings, Zenka instant loans etc. (5 important apps to help you manage your finances).

Finance digital assistants are easier to use than traditional pen and paper budgets. They help you create budgets, keep track of your finances and balance your expenditure etc.

Auditing finances

Get your finances audited by a professional at least once or twice a year. Auditing your finances will open you up to your financial flaws.

Once you discover discrepancies through an audit, it is easier to come up with suitable ways of getting your finances under control.

Auditing helps you trace the blind margins and the upside of where your money goes. From this information, you can build a system to guide you through your financial journey.

If we give the same attention to cash outflow as we do the cash inflow – maybe our finances would be better.

Financial management requires discipline, effort, skill, patience, and consistency. Once you master the art of managing your finances, the rest will roll into motion.