Find us on Google+ My Sensible Cent: 2016

Tuesday, June 21, 2016

10 Tips on How to Remain Poor

In the past we have dwelt on different tips on how to save and achieve that financial freedom; how to break out of the financial rat race. It is with the same vigor that we are going to explore the different tips on how to remain poor or even sink further into poverty. Nothing in this world comes easy and free, and for whatever success or failure in your life you have to work for it. Most achievements in life are earned, knowingly or subconsciously. Below is a look at some ten tips on how to remain poor:

1. Never wake up early. Keep stretching and turning in bed until you get too hungry to continue dozing. If there are no bed bugs, why hurry to get up? 

2. Never plan how to spend your money. Whenever you get money, start spending it right away and when it's finished, you try to count and recall how you spent it.

3. Don't think of saving until you have real big money. How can you save when you earn so little? Those telling you to save are not sympathetic to your burning needs.

4. Don't engage in activities usually reserved for the "uneducated". How can you, a graduate, engage in petty trade, network marketing or home-based production? That's for people who never went to school!

5. Don't think of starting a business until an angel comes from heaven and gives you capital. How do they expect you to invest before you get millions? Even though more than half the businesses in your town were started with little capital, you as a smart person can only start with millions.

6. Complain about everything except your own attitude and laziness. Blame the system, the government and the banks that refused to lend you money. They are all bad and do not want you to get rich.

7. Spend more than you earn. To achieve this, buy consumer products on credit and keep borrowing from friends and employers.

8. Compete in dressing. Make sure you're wearing the latest clothes. Intimidate the congregation with your trendy fashions every Sunday. Whenever your neighbour buys a new phone, you get one that is more expensive.

9. Get yourself a nice second hand car that costs more than three times your yearly salary.

10. Give your children everything they ask for since you're such a loving parent. They should not struggle for anything because you do not want them to suffer that way, they will grow up lazy and hence poor enough to ensure they can't help you at old age.

Unfortunately to avoid the ultimate result of these tips (poverty), you will have to avoid most, if not all, of the aforementioned behaviours.

Friday, January 8, 2016

5 Money Management Tips to Implement In 2016

Proper management of finances is one of the most import things for a Kenyan today. It is getting extremely easy to get buried in debt, and it seems almost impossible getting out of it.

These 5 tips, are very useful if your resolution this year was to get to and stay on track to financial freedom.

 Money Management Tips to Implement in 2016

1. Create a budget, and stick to it!
You probably guessed the first tip right. Yeah, it is the same old cliche, "budgeting". I wish I could say something else but there is no financial management without a budget. That is why you will see this tip in almost every blog you read. Write down your budget, and prioritize everything. Top of your list should be what is extremely necessary. And when I talk of the first item, then savings should top your list. Make sure you have figured out each and every expected expenditure and if possible try to over budget. This way, if something unexpected happens , you won't have to go over your budget, but if there are no unforeseen expenditure, then you have extra money left over. 

2. Open a savings account
If you still don't have a savings account, I would advice you to put all those resolutions aside and start this year by opening one. Savings accounts are very important as they help in times of emergencies and also acts a money reserve for future expenditure and investments. I was taught to try and save at least 3 times your monthly income, just in case you lose your job. (3 months is ample time to get back on your feet). I understand it is hard to just stash that much money away all at once, but bit by bit you will make it.
One easy way to build your savings is to have an automatic direct transfer set up from your checking account to your savings.

3. Live within your means
Always ensure your cost of living is below the amount of money you actually make. It will require good budgeting techniques and persistent monitoring to achieve this. Once you have reached the threshold (that is Income = Expenditure), try to reduce your expenditure by a further 10%. This will ensure that you end up with some extra money at the end of the month after footing all the bills. This also means that if you get a raise at your job or get a better paying job, you should try to continue to live the way you have been before.
This means your savings will increase at the end of the month. Increasing your cost of living unnecessarily, will always hurt your finances and in case of a setback you will find it hard maintaining such standards . So its best to just play it safe.

4. Beware of Credit!
Credit is a double edged sword. Carefully planned, Credit is very useful in the financial world especially when you want to buy capital intensive stuff like a vehicle or a home. However, credit can also be fatal to your finances. Even though, technology has made it easier for a Kenyan today, to get a credit card or some kind of “buy now, pay later” deal, it is extremely important to avoid unnecessary credit at all cost. Talk of M-Shwari, M-Advance, M-Kopa, AFB credit card, Okoa stima, Okoa jahazi etc, all these credit products are easy to get and with minimal or no collateral required. While it may sound like a good idea at this time, it is what really hurts people years down the road.
People go on swiping that credit card as if they will never pay it back, when, in reality, you will need to pay all back, plus interest. If you are a credit user, make sure you have the cash to back it up.

5. Stay Healthy
Health is wealth. And for you to keep healthy, you must invest in your health. Eat healthy food, do exercise, and be sure you have a health insurance. If your employer doesn't provide a health insurance, then you should try and get the cover privately. The cheapest insurance cover in Kenya today is NHIF. For those employed, you should already be a member of the scheme. However, if you are self employed, you can get full insurance cover at only Kshs. 500 per month. The benefits of a health insurance is immense.  With an insurance coverage, you will drastically reduce the cost of medical bills and keep yourself out of debt in the unfortunate event that you need to seek medical care.

If you can practice these 5 money management tips this year, you will be better off. It is always good to take control of financial destiny now, rather than being at the mercy of debt collectors! 

Happy New Year 2016.
May you succeed.