What you need to know about managing your finances
Well as the saying goes recently, ‘Even the government is over-borrowing, we can also borrow as much as we need’ This is a challenge we face as Kenyans despite the fact the there is too much borrowing.
Today as we introduce the weekly digest, we will be looking at our spending habits. There are situations that lead to over-spending. In some cases, we run into debts because of that. This results to defaulting of loans and being listed on CRB.
How should you ensure that your spending does not go overboard?
This is one of the most important section for managing your personal funds. You should know how much income you get and how long until your next pay. If you get paid monthly or weekly, ensure your budget lasts you until your next pay.
How do you organize your income until your next pay?
Well, it is simple, add up all your daily average expenses for the period. i.e If you get paid monthly, add up all your daily expenses and multiply by 30. Next, take out 20% of your income and move it to the savings section. These funds help you in case of emergencies.
Once you have done as explained above, you find that for the period, you will always have flexibility in terms of your spending, it also keeps you away from bad debt because you can borrow what you afford to pay back.
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