A friend of mine once asked me, “Rick, how best can I do my savings?” He wanted to know how nature the discipline of saving and where to put his savings. I liked his question, it demonstrated his desire to organize his personal finance. Savings should be understood as a cost. Budget to save just as you budget for utilities. When saving, set a bare minimum, could be an amount of money per wage or a percentage of every income. We save so that we can spend in future, either in an emergency or an investment. To avoid consuming your savings earlier than planned, put your money in a fixed income account, SACCO or financial asset e.g. bonds. Don’t loan out your savings to friends or family. Money loaned out to support friends is called debt, it is an account receivable and not a saving. After saving, reserve an amount to pay you’re your bills and remember you belong to a self that needs entertainment, a family that has financial needs. Good financial planning requires that you be tax compliant. When making an investment, adequately assess the risks, tithe honestly and spend modestly. Address your needs first then your wants. Personal finance goes a long way beyond
saving. It is like studying a new language. You have to know the basics such as greeting and counting. Saving is a basic in personal finance. It is followed by the investing and consumption functions. All these three are functions of income. Therefore find yourself an income at all costs. Go out of your way and make a sale, get a job, build a business or collect rent from your tenants. It would be better if you can multiply your revenue streams, but first build one reliable source of income however humble it may be. Embrace bank loans more than loans from friends. Bank loans give you a reasonable repayment timeframe and are insurable. They don’t ruin your friendships when you fail to pay an instalment in time. In fact, when you have a genuine reason, you can negotiate for a moratorium. Do not burry your money in sand and expect it yield interest. Modern ways of holding money are digital. Therefore have your internet bank at hand, use your phone to pay bills wherever you go. This makes it possible for you to track your financial statements and boosts your credit rating.