HOW TO MAKE YOUR MONEY WORK FOR YOU

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finance

An old adage goes: ‘a fool may make money but it takes a wise man to keep it.’ Truly, making money is one thing and keeping it or making it work for you is another. While most people have found it difficult to make money work for them, it is the best thing one can do as it will not only help you enjoy life, but also secure your future. Here are tips on how you can make your money work for you.

Start saving as early as you can: The first step to getting your money work for you is saving; you can never go wrong with this. Make sure you save on every paycheck since your money can’t start working for you unless you keep some aside for the plans you have. A good way to save is to open a savings account and instruct your bank to automatically transfer a stipulated amount to the savings account as soon as you have been paid.

Look for long-term investments: Smart people always invest in long-term goals. A one-year investment may not give you a good return; five years is better but 30 years is the best. There are many ways of investing; you can invest in shares and bonds, property or privately managed bonds among others. It is recommended to research before you start investing in order to identify a platform that will work best for you.

Be consistent in your saving: Decide on how much you will be saving each month and budget with the remaining fraction. Being consistent in saving is as important as starting to save early. Don’t wait until you are in your 40s to start saving; you will benefit more if you start saving in your 20s or as soon as you start your first job or get your first source of income, and be consistent.

Take control: You can’t make something work for you until you take control of it. You can do a few things to help you earn more, but a lot more when it comes to what you do with each pay packet. Take control of your money through budgeting and abiding by it.

Pursue a professional course: Increasing your worth in the job market by pursuing a degree or a certificate will make you more marketable. This will translate to higher earnings, meaning more money at your disposal. However, you have to play your cards very well; don’t just rush to pursue education. First weigh your options and if it is the best thing you can to yourself at that point in time, go for it. Just as it is important for you to start saving early, it is also prudent to pursue education while you are young before responsibilities such as family catch up with you.

Choose credit cards with rewards: Using a credit card might not feel like putting your money to work but choosing a card with reward points means each shilling you spend with your card is doing double duty. For instance, you can choose a supermarket credit card where you can redeem your points after a certain period. Make sure you compare different credit cards before you settle on one. If you travel regularly, do the same with the travel credit cards.

Invest in real estate: The advantage with real estate, especially in Kenya, is that the trend has been one of appreciation. You can consider buying a home to live in as an investment, or you could invest beyond your home into land to sell later. Another alternative is to build rental houses; here, the location is key.

Seek out financial advisors: Sometimes, having money can cost you money. You may need financial advisors to help you manage your money wisely.

Make friends with successful people: The idea is to surround yourself with people who have made it. You will tap a lot from their experiences and this will help you make more informative decisions. Note: we are the people we associate with.

Read widely: Even after you are through with college and university education, you need to bury your head in books about investing or personal finances, you can also read biographies of successful people. These books are barometers of good financial decision-making. They will help you to find right information and education, which in return will help you make sound financial decisions.

Set goals: Don’t just invest; have specific financial goals that you want to achieve within a given time. Wealth doesn’t just come; you work for it and it takes focus, courage, knowledge and a lot of effort. Be realistic while setting financial goals but at the same time don’t be afraid to dream big.

Published April 2016

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