Where does all my money go to? I can barely survive to endmonth! | Kenya Business Discussion Forum
  1. SIGN UP NOW! MARKET STATISTICS: UCHM KES 2.40 (+6.67%) | HAFR KES 0.85 (+13.33%) | COOP KES 17.50 (+2.04%) | KNRE KES 20.50 (-1.20%) | SCOM KES 20.75 (-11.70%) | MSC KES 0.75 (-25.00%) | KEGN KES 7.05 (-16.57%) | BBK KES 8.20 (-13.68%) | XPRS KES 2.75 (-16.67%) | NSE KES 14.70 (-4.85%) | TCL KES 7.00 (-5.41%) | DTK KES 138.00 (-8.00%) | KQ KES 6.50 (+26.21%) | FIRE KES 2.85 (+21.28%) | KCB KES 38.75 (+1.31%) | OCH KES 2.55 (+8.51%) | SASN KES 27.75 (+8.82%) | FTGH KES 5.30 (-0.93%) | BOC KES 84.00 (-6.67%) | C&G KES 18.70 (-6.50%) | PAFR KES 25.00 (-9.09%) | BERG KES 56.50 (-0.88%) | SCAN KES 20.00 (+10.19%) | EQTY KES 37.00 (-6.33%) | MASH KES 10.75 (-8.90%) | KPLC KES 6.50 (-13.33%) | CIC KES 3.70 (-2.63%) | KENO KES 12.30 (+1.23%) | ARM KES 20.00 (-3.61%) | ICDC KES 39.75 (+0.63%) | WTK KES 180.00 (-2.17%) | SCBK KES 200.00 (-1.96%) | NIC KES 28.00 (-11.11%) | UMME KES 15.95 (+15.58%) | TOTL KES 20.50 (-2.38%) | CABL KES 5.80 (+4.50%) | EABL KES 232.00 (-3.73%) | LKL KES 4.05 (-19.00%) | NBV KES 6.50 (-3.70%) | CFCI KES 10.40 (-3.26%) | BRIT KES 11.30 (-9.24%) | CFC KES 65.50 (-6.43%) | CARB KES 12.70 (+1.20%) | BAMB KES 164.00 (-6.29%) | UCHM KES 2.40 (+6.67%) | HAFR KES 0.85 (+13.33%) | COOP KES 17.50 (+2.04%) | KNRE KES 20.50 (-1.20%) | SCOM KES 20.75 (-11.70%) | MSC KES 0.75 (-25.00%) | KEGN KES 7.05 (-16.57%) | BBK KES 8.20 (-13.68%) | XPRS KES 2.75 (-16.67%) | NSE KES 14.70 (-4.85%) | TCL KES 7.00 (-5.41%) | DTK KES 138.00 (-8.00%) | KQ KES 6.50 (+26.21%) | FIRE KES 2.85 (+21.28%) | KCB KES 38.75 (+1.31%) | OCH KES 2.55 (+8.51%) | SASN KES 27.75 (+8.82%) | FTGH KES 5.30 (-0.93%) | BOC KES 84.00 (-6.67%) | C&G KES 18.70 (-6.50%) | PAFR KES 25.00 (-9.09%) | BERG KES 56.50 (-0.88%) | SCAN KES 20.00 (+10.19%) | EQTY KES 37.00 (-6.33%) | MASH KES 10.75 (-8.90%) | KPLC KES 6.50 (-13.33%) | CIC KES 3.70 (-2.63%) | KENO KES 12.30 (+1.23%) | ARM KES 20.00 (-3.61%) | ICDC KES 39.75 (+0.63%) | WTK KES 180.00 (-2.17%) | SCBK KES 200.00 (-1.96%) | NIC KES 28.00 (-11.11%) | UMME KES 15.95 (+15.58%) | TOTL KES 20.50 (-2.38%) | CABL KES 5.80 (+4.50%) | EABL KES 232.00 (-3.73%) | LKL KES 4.05 (-19.00%) | NBV KES 6.50 (-3.70%) | CFCI KES 10.40 (-3.26%) | BRIT KES 11.30 (-9.24%) | CFC KES 65.50 (-6.43%) | CARB KES 12.70 (+1.20%) | BAMB KES 164.00 (-6.29%) |
    Dismiss Notice

Where does all my money go to? I can barely survive to endmonth!

Discussion in 'Personal Finance' started by Faith W, Jun 29, 2017.

  1. Faith W

    Faith W Business Consultant

    Where does all your money go?

    Payday is just around the corner for those who are employed, though some, like bankers, already have their salaries in their accounts. As we come to the end of January, the current financial month, and inch closer to February, the beginning of a new financial month, it is good to ask yourself, do I really know exactly where my money goes? A lot of people live day by day, week by week, month by month and year by year, without really knowing where exactly their money goes.

    They might know that it pays the bills, but how much exactly pays the bills? How much goes to fuel? How much to entertainment? If I ask you how much you spent on rent last year, would you be able to tell me Sh300, 000 without faltering? What about how much you spent on water or food or electricity or gas?

    To optimize your money, you should be able to know where it is going. When you know exactly how much is going into which expense, then you can analyse if you are spending your money exactly as you want to or whether you can change some of the items on your budget. For instance, by tracking my own spending, I realized that I was buying a packet of mabuyu (coloured and flavoured baobab seeds) every day. This habit added up to about Sh14, 600 every year on mabuyu.

    I do love my mabuyu and want to continue eating them once in a while, but do I really want to spend Sh14, 600 on mabuyu? I could have bought some shares with that cash or invested in a unit trust or even bought a much-needed gadget. That’s what I mean, when you can tell exactly where every last shilling of your money is going, you can make better decisions, decisions that actually work in your favour, instead of complaining all the time that you have no money to save, yet every year you spend Sh14, 000 on mabuyu or Sh30, 000 on handbags or clothes that you don’t even use. So how do you tell where your money is going?


    1. The notebook approach

    Carry a small notebook with you starting tomorrow and note down every purchase you make, no matter how small. For instance today’s entry could look something like this.

    25th January 2016

    Morning fare Sh100

    4 Tropical sweets Sh10

    1 PK chewing gum Sh7

    Lunch (rice and beans) Sh100

    Airtime Sh250

    Bundles Sh50 via Mpesa

    Evening fare Sh100

    Boda boda Sh50

    Bread Sh 55

    Milk Sh45

    Kenya Power tokens (16) Sh600

    Total: Sh1367


    The next day you do the same and so on for a month or three or more. A month is sufficient to get a grip on where exactly your money goes. Once you’ve collected data for a month, group it into categories like in this chart. Add categories if you don’t see them on the chart, but they are there in your spending.

    Knowing where your money goes might help you find some money to save and invest. Like in my case, I might decide to be carrying a banana from home instead of buying mabuyu every day and only eating a small pack of mabuyu once or twice a month as a reward for meeting my savings goal. By cutting out mabuyu, I might save an extra Sh10, 000 that year.

    2. The app approach
    If carrying a notebook is too much work, you can download an app like Monefy or the local Centonomy Spending Tracker and use it to track your spending every single day. The goal is to find out where your money is currently going so that you can decide if you want to change some things to use your money more optimally.

    Once you track your spending, see if you are using your money within the recommended budgetary allocations. If not, you can either reduce your allocations from less important categories, and increase allocations to more important categories, or find a way to earn more money to meet your needs.

    3. Take charge of your spending

    One way to check your spending so that you don’t spend too much in one category at the expense of other categories is the envelope system popularized by Dave Ramsey. Allocate a specific realistic amount to each budget category and put it in an envelope (the envelope can be virtual).

    So if you have set aside Sh4000 for groceries between 1st February and 29th February, you can only use that money for groceries. If it is in an actual envelope, you can see the money being depleted slowly by slowly and you cannot use that money for anything else.

    Once it is depleted, you can no longer buy groceries until you get more money/income the next month. The envelope system is good to control your spending on budget items that usually go out of control. So for instance, you can have an alcohol envelope, an entertainment envelops, shoes envelop, fun money envelop to do with as you please.
     
    David likes this.
  2. pistol valy

    pistol valy Founder Member

    You are right Faith W, a lot of people live without really knowing where exactly their money goes, because of their fault. These people don't use a budget for their expensese, they need to track all their income, bills, loans, day to day payments, and all the rest as food, clothes, trips, school payments, etc. If they would be responssible with their money and would plan a budget for every month I am sure their financial life would improve a lot!
    We all make mistakes and sometimes and sometimes we scatter the money without care, but if we learn from our mistakes we can remedy the situation and change it before to become worse!
     
  3. Purity

    Purity Gold Member

    Now these is what budgeting is,I never new its important to record even things like sweets and airtime they never anywhere I'm my budget.
     

Share This Page