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.

How to Save for the December Holiday

The Christmas Holiday is here with us, the jingle bells are ringing already, and many people are looking forward to spending quality time with their family and friends. The truth is that for you to enjoy this holiday and any other, you need to have money. Not just money, it has to be enough or else you will live with embarrassment or in-imaginable debt. Avoiding these two, will require some smart spending on your part.

Accordingly it is always wise to save for the December holidays because there is always a cost that comes with the season. Whether it is traveling upcountry, or attending a social function, you will always require to have some money.

Given that saving itself is not an easy task and most of these promises we make to ourselves that we are going to change the situation often remains at that level, I would like to look at 3 tips to help you save for and during this festive month.

3 Saving tips to Guarantee Holiday Celebrations

1. Make use of off peak hours

If you are daily commuter across the urban centers, you have probably noticed that the fares are very expensive during rush hours. In the morning, leave very early and in the evening leave slightly late to avoid the peak hour rush.
That 30 or 20 shillings savings fare saved, per trip, may seem like a small measure, but it will pay off in the long run. For example if you use two matatus to and from work every day. It means you are making 4 bus trips. Multiply that by Ksh. 20 and you get a saving of 80 shillings daily. In 24 days a month that’s already 1,920 shillings saved.

Traveling to up-country can be made much earlier or just after 25^th and making sure you come back earlier (generally before New Year). Delay a bit and you will surely pay double.

Fares always consume a great percentage of our income without even noticing. At times such as this, every coin counts.

2. Stop unnecessary spending

I know this is one of those things which are easier said than done. It requires discipline to avoid some unnecessary expenditure, especially the things you have got so used to that you start to think they are part of your life. Are you that kind of a person who likes to treat themselves to pizza, groundnuts, ice cream or soda? As the festivities begin, it will be wise to pause all that and save this money for the holidays. Spoiling yourself will follow in the next few days.

Impulse buying is the number one reason many people find themselves totally broke just days after payday. Resist the urge to make unnecessary expenditures and you will be smiling when you check your bank account during and after the December holidays.

3. Start saving early enough

Realistically speaking, if you haven’t been saving the rest of this year, there is absolutely no way you can make up for it now. In case you intend to enjoy the festive periods, you may want to start your saving as early as January.
Early saving will spare you the pressure that comes with the huge holiday expenditure because you will have a set plan and you will be spending within a budget.

To avoid the January blues, you need to make realistic holiday plans. If you do not have money to travel, upcountry or to the coast, you may want to pick a fun, less costly activity to indulge in.

Kenya Based Company Fuzu Offers Lifeline to Job Seekers in All Sectors

Kenya based company, Fuzu has launched an internet based recruitment platform akin to Linkedin that is  intended to tap into  both the informal sector and the formal employment sector.

The platform, the first of its kind in Kenya, will offer diverse services. What sets Fuzu apart is its recruitment processed based on experience rather than the education biased system, meaning that there will be considerations on experience, skills, and talent.

LinkedIn steadily facing competition from players ranging from -Facebook for business- to small start-ups like LinkedIn for doctors, LinkedIn for teachers, and the like.

Fuzu automatically matches a job seeker open positions that fit their profile. Through Fuzu, all a job seeker need to do is send an online application, whenever they come across an interesting opening. Once, your application is received you become part of the selection process.

The employers will then have the chance to investigate individuals online and launch recruitment campaigns. Those eligible for employment will be connected to couching, mentorship, reasoning test and English language test.

Though the site cuts across all kinds of skills and employers, it will be the first to keenly consider talent and experience in connecting employees to employers.

INFORMAL SECTOR

A new report by the United Nations’ Economic Commission for Africa ranks Kenya as the country with the highest number of informal sector employment in Africa at 77.9 per cent.

The study attributes the high level of informal sector workers to inability of the formal sector to absorb the huge number of job seekers.

Fuzu is banking on the sector to grow its usage in the country. The site was launched simultaneously in Kenya and Finland with plans to move to Tanzania, Uganda, Rwanda and Burundi as it widens its footprints to the rest of the world.

Already, KONE Kenya, Craft Silicon, Techno Brain, Chase Bank, Equity Bank and M-Kopa are enrolled onto the platform.

Kenyans living abroad will also benefit from the recruitment site since they will scout for jobs in Kenya as they make plans to relocate.

Fuzu now join local recruitment firms Duma Works and Net Consult. However, the new entrant thoroughly profiles job seekers allowing no chance for upload of CVs.

Breaking Out of the Financial Rat Race

Photo courtesy

The financial rat race is an endless, self-defeating and futile pursuit of financial freedom. It depicts  the futile efforts of a lab rat trying to escape while running around a maze. The rat never gets out of the maze and the sad bit is that it has nothing to do about it. Just like the poor rat in the maze, many of us find ourselves trapped financially. 

It is a common problem among the working professionals, for salaries to disappear as soon as they hit their accounts. Two weeks after receiving the salary, you are broke and wondering who will loan you money to sustain you for the next 15 days. This translates to living a half a month on debt which must be paid next month.  As much as you would wish to, you tend not to have an escape route as you are poised to borrow every month to finance your past expenditure. You keep on promising yourself that with the increase in income, you will settle all your debts, be financially stable and save for your future. However, as your incomes grow, so is your expenditure. As you think on how to cover the debts, more expenditure awaits you. Your kids get old enough for school, medical emergencies become inevitable, you need a car etc. You end up consuming all you have made, if not more. The debt burden grows: morgages,car loans, school fees loans and the rest. Fast forward to that day you would have wished to retire and you find that you cannot. Why? You do not have any saving to sustain your life. Call it whatever you want but, the truth is you are dependent on work to eat. You are in a financial rat race. So why does this happen and how can we break out?

Reasons why you are Always broke:

1.You lack a budget

Are you an impulse buyer? Do you buy things on the whim, without analyzing if it is a necessity or not. For your money to be of any help, you have to enlist all that is a necessity and in their order of need. Leave out anything that you can do without. Remember savings is the first necessity here, followed by debts. Helb loans, M-shwari, friends soft loans, comes to mind. Save for your future and have a plan on how to clear your debts. When the budget is made and sound, adhere to it. 

Photo credit

2. You are not saving 

I wish I would have started with this, but for me budgeting comes first. 

Do you always spend everything in your account? This will surely leave you broke and in debt. You must save for a rainy day. Savings or investments should never be sacrificed for expenditure. It is rarely possible to do what you intend to i.e. start savings when the income increase. The moment you get a taste of what you can consume rather than save, you will continue doing that. So it is good to make saving a culture. Savings should not became the option and consumption became the necessity. To break out of the financial rat race you have to acknowledge that expenses will always go up, so to postpone savings is lying to yourself.  Inflation is constantly living with us, only the rate changes. In fact the more you climb the social ladder the more things are thrown at you to buy. Whatever life you choose, the level of savings should never depend on the cost of living. That is why saving should always be the first in your list of necessities and should never be compromised whatever the situation. (Repeat). When your expenditure increases, reduce other consumption. If your motive of working hard is to cover for increased expenses, then this will never end. Rise in expenditure will always outshine your income increase. There will always be that new thing to buy, new cars to drive, new places to visit, new schools etc.

 3. You are Philanthropic

Is it common for your relatives and friends to call you once it is end month to send them something? Do you feel compelled to do that even at the expense your own needs? You need to stop this. Even though it is good to help your relatives and friends, do so with your financial status in mind. If you are not able to help just explain to them in a polite manner that you are not in a position to do so. You may help them later on when you are able to. It is mediocre to help your brother pay his son's school fees only for your child to be sent home for lack of school fees. I know they will talk bad if you don't help, but remember you do not achieve anything by pleasing people. Be honest about it and all will be well. The blessings will come, especially when you will be helping again.

4. You are constantly Borrowing:

 Are you always seeking a soft loan to upgrade your life? You must stop this. Loans are not bad, per se, however, borrowing for aspiration is bad debt. Loans are important for personal development and growth. However if you constantly borrow even for the slightest things, you will forever remain broke. You will be depressed to learn that after paying your debts, you always have nothing left to consume, let alone save. Always live within your means. By this I mean, buy what you can afford not what you can afford repayments on. (Repeat).  We often confuse these two.  Just because we qualify for a loan to buy it does not mean we can afford it.  The trap of borrowing to maintain an aspirational lifestyle is very common and it will lead you straight to the financial rat race. Borrowing for a holiday, taking M-shwari loan for lunch, swiping a credit card at a restaurant, and using your AFB credit card on that trendy shoe is not right . Do not borrow to live a life you cannot afford. (Underline)

Because of all these reasons, at the end of the day you will not have an exit.  You cannot stop working because  you never invested enough to sustain your lifestyle. The true means out of this rat race is having built an investment portfolio that can sustain your lifestyle. NSSF pension funds alone will not be enough. Therefore, to live and sustain the lifestyle you desire, you not only have to work hard now, but you need to prioritize building of the assets rather than consumption. Have your priority right and you will be amazed at how much wealth you will accumulate. You may even find yourself retiring early.

Five Reasons You Just Don't Have a Job Yet

Lack of employment is one frustrating thing graduates go through. Most people have predetermined limit when they intend to accomplish certain goals and this perhaps adds more more pressure leading to our desperation in our job search.

Statistics shows that in a graduating class, only 3 out of 10 graduands get jobs within a short time after graduation.
Many reasons contributes to this endless job seeking menace in the country. While the 30 percent gets jobs early, some graduates have stayed for several years without a job. Some may have given up but many still soldier on.

The following are some of the reasons you could still be waiting in line for your first job.

1. Poor CV:

The CV is the number one tool to  sell you out to your potential employers. Your CV should be structured in such a way to highlight your skills and entice that employer into hiring you.

2. Applying for the wrong Jobs

You may be applying for jobs you do not qualify. This will disqualify you during the initial recruitment stages, you may not even make it to the shortlist.

Apply for jobs that match your skill sets and experience in order to have that edge over your peers.

3. Wrong Attitude:

"Your attitude determines your altitude" is what were told in school. This cliche`e is as applicable to job as is to your career. Steer away from the your mind away from this attitude of “there are no job vacancies in Kenya”. If this is the attitude you will want to take carry with you while job searching, it will surely drain you.

Stay positive even when every odd is against you. This will boost your confidence and determination.

4. Lack of Focus 

If you don`t know where you are going then you won`t end anywhere. Having a goal in your job search and staying focused in achieving this goal will definitely boost your chances of landing that job fast. This may come to narrowing down that extensive job search list and going for specifics. When you can clearly picture what you want, it will be easier to chase down that particular dream. Don't be searching for any job... go for a specific position.

5. Lack of Market Skills

Having that degree alone is not enough. Most employers are looking graduates with practical skills applicable in the market. Internships and volunteering  are excellent ways to bridge this gap and gain these needed skills. Instead of just sitting home frustrated about lack of jobs, do some internships.

If you can't get that internship, perhaps you should think of volunteering. This goes a long way in helping you build skill set that will put you ahead of other job seekers out there.
Landing a job may be hard, and hectic, but try changing the outlook on things. Adjust your job search technique and see how far it will take you.

Why a Government Job is Likely to Stall Fresh Graguate's Career

Working for the government here in Kenya can be a walk in park; ask anyone working under any ministry or government institution and they will surely confirm that to be true. Only a few will genuinely say they are having too much to do and these very few are those who are keen to take initiative.
Most Government workers will leave their work premises at 5.00 PM having done very little or worse, no work, they never understand that there may be a need to work late nights at your job. So, if you are job searching, they will advice you to find one in the government. Why? This is because it is in Government where people are paid to sit around, swing their chairs and do absolutely nothing.

Kenyan job seekers are often enticed by these jobs as they offer the perfect opportunity to earn a living without having to stress on issues too much. It is, however, the one mistake you will want to avoid making.

Why Government jobs is one of the career mistake for fresh graduates

If you have ever been to a government office, either to get your passport, national ID,  NHIF card, Birth certificate, or any other document that is required of you. For every Government office there is the good and the bad; good employees who will take their time to satisfactorily tend to you and the bad employees who will sit at their desk, make you queue for long hours, then close and go for lunch without notice or hurry out at 4.30pm and tell you to come back another day.

It is almost impossible to find a good government, but when you meet one, be grateful. I am a frequent visitor to the NHIF, NSSF offices, Public hospitals, Huduma center and Registrar of persons offices and a part from Huduma centers, which is the best innovation in Kenya since Safaricom, the rest of the government institutions are inefficient and annoying. Nurses at Mama Lucy Kibaki Hospital will just stare at your dying patient as their listen to music on their China phones. Long queues awaits you at both NHIF and NSSF offices and to be served past 3pm on Friday is a crime in most government offices. Even POTUS Obama alluded to this inefficiency in Government institution in his book "Dreams from my father" where he went to follow up on his misplaced bag only to be dismissed arrogantly by a lady busy chatting with her colleagues at the airport's reception desk.

More often we have had to put up with the laxity that comes with government offices, and being part of this inefficeint team could impact negatively on you and your career growth as well.
In a bureaucratic work place where services are done according to laid down work standards and follow a certain process, it is hard to become an effective employee, especially when the task requires you to liaise with others who are, more often than not, non coorparative.
While you may want to be singled out and distance yourself from the general perception of government officials, others are bound to drag you down with them. If your colleagues decide to perform a 5 minutes' task in 3 hours, then you get pulled into the ineffectiveness.
If you aim to be an effective and successful person in later days and enjoy being in your dream job, then government offices would not be the best place to start off your career. You’ll hardly have anything to do, which means you will not encounter any challenges to toughen you up for later jobs and the world.
Being that creativity is always lacking in government jobs, you will have a hard time making informed decisions.