Just the other day, twitter was on fire as one guy decided to share his monthly expenditures on a net pay of Sh40,000 that saw him remain with a mere Sh2,000 as the balance and no savings laid out on his budget.
Twitterers were quick to criticize the person’s lack of personal financial management skills, as others pointed out they earn less than him and still live a comfortable life. Still, others saw a reflection of themselves in him and mourned how tough life has become in the current state of Kenya’s economy.
However, the budget list that targeted mainly the middle class residents of Nairobi City showed that house rent, transport, food, and college loans consumed A huge chunk of the pay raising questions on the high cost of living but that is a story for another day.
Back to money management patterns, it is evident that many individuals lack conscious financial plan that restrains them from saving or investing strategically.
This is due to poor financial decisions such as spending on products and services that are not needs, unplanned purchases and spending more than what one can afford.
Personal financial control is surveyed to be the most common new year resolution that people make but fail at it by the first quarter of the calendar.
Below are tips that will aid an individual reshape their attitudes towards spending, break bad habits by orienting themselves to smart strategies.
Take advantage of technology
Technology is what defines the huge difference between Information Age and Industrial Era. With just a smartphone gadget, you can keep track of your cash from paying bills, purchases to starting investments, all you have to do is download a money management application. This way you can get accountable with every coin you spend and get into saving mode on personal finances. Examples of such Apps are: Unsplurge, Jamjar, 22Seven, Spending Tracker, Mint among others.
Reflect on wasteful spending pattern
Who are your money mentors? This question will help in assessing the bad money habits you want to break. If your inner circle is made up of people who give much thought on the present day lifestyle than a secure future, then you are set for rough waters in years to come. Further ask yourself, ‘Why did I purchase this? Did I need it? Is it in the budget? Can I afford it?’ You can also seek professional financial coach or enroll in related short courses to help you out.
Determine your bad spending habit
Take an insightful look at where your money is going and how you are contributing to your spending habits. If you are an impulse purchaser, try to eliminate your emotional state from the decision making process by adopting the tried-and-true strategy. The tactic is to postpone the purchase by 24hours and reassess if you still need the product or not. You can also get rid of marketplace apps from your phone which has made impulse purchasing easier.
Review your spending patterns
After purchases, jot down everything you are spending your money on. Check out on the recurring excessive or unnecessary expense that you can trim down. For better analysis, look back as far as six months of your financial statements and get critical on where your hard earned cash is going.