Quote of the Week: "Anybody can be going from being broke to being wealthy, as I did."~ Jon Lovitz
We have all been there, you had money a few weeks ago and you “don’t know where it’s all gone now”. Being broke is common regardless of one’s income level. The following tips will help you figure out what goes wrong and how to will fix it:-
1. Budget, Budget, Budget
Budgeting is Personal Finance 101. It is the cornerstone of sound financial management. Governments and organizations do it, and individuals should also make it part of their regular routine for successful money management. If you do not know where to start, use our simple budgeting tool. A budget will help you track your expenses and identify areas you are wasting your hard-earned money. In the words of Dave Ramsey, “A budget is telling your money where to go instead of wondering where it went.”
2. Lifestyle Change
If you prepare and follow a good budget, there is very little chance of you going broke. Unless, of course, you had a deficit to begin with in which case you should try to fix it first, and fast! In most cases, our lifestyle is what leads to a shortage of cash a little later into the month. A budget is in some ways a lifestyle audit. You will identify where you are overspending so you may cut back on those expenses. You will never go broke when you live below your means.
We know it sounds odd to ask you to save more to avoid going broke. You may argue, and rightly so, that you do not have enough money to spend and save. However, if you are living within your means, you can squeeze in a few coins to save. You do not need to save thousands of shillings every month. The Zimele Savings Plan allows you to save from Kshs. 250 at your pace and convenience.
Building emergency savings will shield you from tough months that will eventually come your way. You could also use your savings later as seed capital to start a business and increase your income. So, save! Build up your savings slowly and patiently. It will pay off!
Conclusion: Being broke on a regular basis does not mean you are poor, it just means you have to rethink your financial management. If it is chronic, then the long-term solution will be to either adjust your lifestyle, or to increase your income. The tips here are only short-term solutions to help you avoid turning simple problems into issues with long term implications that take longer to fix.