Listen to This Article Enhance your reading experience by listening to this article.

Zero in on needs, wants

You don’t need to keep money in the bank for big purchases. It is the day-to-day expenses that tend to strain finances. Be ruthless on where you want to spend your hard-earned cash, by distinguishing between things you want and those you actually need. When you’re at the store and have an item in hand, ask yourself if you really need it. If you’re not sure, leave it in your cart after you finish shopping. Before heading to the till in person or virtually, audit your choices.

Scale back on consumption

After determining your need or want, look for more frugal ways to get it. Scale back the amount of money you consume by committing that before you buy something new, you’ll first check what you have at home. Ask friends if they have what you need and aren’t using them. Also, look at options to buy used or recycled. This might mean joining your community Facebook group to see who has something available for free, what’s on offer at the discount market, or where the garage sales are next weekend.

Draw your budget

It is very hard to manage your spending without a budget, therefore creating a realistic budget for your household accounting for all of your routine spending, monthly bills, irregular expenses and savings. This way, you can control your expenditure by knowing how much you’ve planned to spend on each type of expense. The budget will also guide you on how much you can help your family with their expenses. Before you cash out any savings or commit to ongoing support, work through your plans with a qualified professional. The last thing you want is to overspend down the road.

Save on grocery shopping

Groceries take a big chunk of Kenyan consumers’ monthly budgets, with prices rising steadily for the last few months. With increases expected for the rest of the year. To save, plan your meals around what’s on sale or available at a discount. Buy in bulk when the bigger packages are on for a better price than the smaller ones. If bulk buying is too much for you, shop with a friend and share the items and costs. Also, cook in larger portions and freeze the leftovers for lunches or meals on the days you don’t want to cook.

Reduce major expenses

By outlining your budget, you are able to see your biggest expenses every month, whether housing, transportation, groceries or debt payments. Consider every bill in each of those categories carefully to see what can be reduced or eliminated. If you can’t give up something, put it on hold for a few months to see if you can’t do without it. For instance, consider carpooling to split the bill. If you are indebted you might want to contact each of your creditors and ask to restructure them.

Invest to beat inflation

A good budget gives you a buffer to save, which will allow you to set money aside for investments, and absorb some price rises without changing your spending habits. Several asset classes perform well in inflationary environments. Tangible assets like real estate and commodities are historically seen as inflation hedges. Continue to save and invest your money, especially for retirement, because you do not have control over economic conditions, unlike your spending and saving habits.

Trade down, not up

Finding a roommate to split your rent, especially for students and bachelors can take a big chunk out of your monthly expenses. However, don’t forget the most important factor in choosing an apartment: location, location, location. Don’t squander your budget trying to live in an exclusive part of the city when you might be able to get something of equal size or bigger for less money in a cheaper neighbourhood.

Staying loyal

You don’t always have to forgo services to save money. If you understand a store’s policies or are a loyal customer, you might be able to qualify for a discount.
Services like dry cleaning will usually deliver and provide a discount for payment upfront. Likewise, liquor stores will offer discounts if purchasing cases – and also deliver. Most convenient stores/ supermarkets like Naivas, Quick-mart or Chandarana have loyalty cards. By staying loyal, you might also be able to get a price reduction on purchases if you are a member of social organisations like the rotary club.

Cook for yourself

If you live in an area with numerous restaurants, it can be tempting to eat out frequently. And if you’re working long hours or have a long commute, you probably don’t feel like cooking every night. The problem is, you could go broke dining out too often.
Avoid this by simply making dinner beforehand and meeting your friends when you have already eaten. By planning ahead, you can make cooking for yourself less of a time-consuming chore and more of a cost-saving hobby or lifestyle change. Shop for groceries strategically at farmers’ markets and discount chains, taking advantage of sales and app-based coupons whenever possible.

Bottom line

With a rise in the cost of living, more people are tempted to go for readily available mobile credit to pay for everything — from education costs for family and buying basic commodities. Avoid facing drastic consequences by taking control of what you can now. A combination of decreasing your spending and, where possible, increasing your income, will help you weather the financial storm successfully.