Breaking the PAYCHECK-TO-PAYCHECK cycle

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We all get that feeling in the pit of our stomachs when we realise that we have just used the last note in our wallet and yet payday is a week away. The struggle of living from paycheck-to-paycheck in Kenya is an epidemic that needs to be wiped out like vermin. It is an unsettling reality that very few Kenyans have enough money to cushion them in case of a rainy day. Change is more than necessary in order to break free from this vicious paycheck-to-paycheck cycle. Here is how…

Save, save, save.This cannot be underscored enough. Whatever financial literacy seminar you will attend, you can be sure that this will be on the menu. So, for the umpteenth time, save. The first step to saving is opening a savings account and setting up an auto transfer into the savings account. Determine the amount you want to save and this can be as little as Kshs 500 – this ensures that you are automatically saving something. In the long run, you will be assured of an account that is not reading negative.

Create a budget and stick to it.Many of us cringe at the word “budget” but without it, we muddle through bill after bill. Think of budgeting as a process of summing up how you use your money and creating guidelines. Not only does it increase your consciousness of how you spend your money, but also helps you spend it on important and necessary things. When coming up with a budget, start by going through your bills for the last three months. This will provide useful information about your spending habits. Review the bills starting with the most important items to the least important. Look for ways of reducing the expenses by ruling out bills that you can live without by categorising them into needs and wants. One feature of a successful budget is customising it to your needs.

Do shopping once a week. Select one day of the week when you will be doing your household shopping, be it groceries or vegetables. We all have the best intention when we rush to the supermarket or the market to grab that one item but inexorably, that loaf of bread or bunch of kales metamorphoses into a loaded grocery trolley with a cluster of needless item. Eventually, you end up spending more than you had intended. Many of us are guilty of this. Keeping your shopping to once a week and always preparing a shopping list beforehand will grant you opportunities to save a lot of money.

Cut down on the days you go out. Let’s be candid here, we all need time to socialise and unwind with friends. It is also a reality that we spend a lot of money during these outings that sometimes we are forced to leave our phones with the bar attendant as a warranty to clearing our debts. But it need not be this way. If you consider going out once a week or twice a month, and staying in the other nights, you will definitely see some changes in how you spend your money. This step allows you to have fun and at the same time save some bucks.

Be accountable. Have your friend or significant other tell you how they spent their money and you do the same. Accountability is a great motivator as you are more likely to follow through your plans when someone is holding you to a particular task. This will keep you from spending thoughtlessly.

Start a side hustle. Really. One of the reasons why you are stuck in this rut of paycheck-to-paycheck is because you are relying solely on your paycheck. You simply have no other source of income. Investing in a side hustle will go along way in ensuring you have a constant supply of money no matter how little. Side hustles range from working overtime at your place of work to starting a micro business such as supplying eggs or milk to your local supermarket.

So if you find yourself living from paycheck-to-paycheck, challenge yourself to take these transitional steps this month to set yourself on the track to change.

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