Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this” Dave Ramsey

Steps to save/make more money:

1. I think the first and most important step for me is to ensure that I do not get into ANY additional debt – specifically credit card debt or consumption debt. Good debt such as buying a car, borrowing for business is fine. Earlier in the year, I piled on more credit card debt, I was in the UK and I wanted to shop, I told myself that I would borrow 2,000 and I would pay it back over 4 months. Guess what – I have never managed to pay it back. The most ideal thing would be for me to cancel that card all together because even if I do manage to start paying down the balance, the temptation to spend again is too great. The next best thing is to keep the card but not to borrow any money on it, if I use it – then I pay it back that month.

Step 1 is to cancel any outstanding credit cards

2. The 2nd step is to decide on a monthly budget which should be sufficient to cover expenses for my lifestyle.

Step 2 is decide on a monthly budget

3. Step three is to pay yourself first, which is probably the most important step, I also call this reverse budgeting. After you have taken money out for your savings or investment, what you have left is what you can spend as your monthly budget. What I do, is that I save either in my SACCO or invest in equities as these are places where I cannot access the money easily which is key.  I started investing rather late, which was a big mistake that I made. The reason that I did not invest earlier was that I preferred to save up cash but thinking that I could save cash was a lie because its like telling yourself you can keep chocolate in the house and not eat it!

Pay yourself options:

  • Pay down the credit card
  • Deposit in SACCO
  • Invest in Equities
  • Invest in starting a business

Step 3 is to PAY YOURSELF FIRST every month

4. Start saving investing in an investment policy. I have started saving up 7,500 Shs every month in a 10 year investment policy with Liberty Life. What I like about this is that once you have committed, you are forced to save every month otherwise you may lose all your money. Its not a cheap way to invest, as you do pay fees but it at least commits you to saving for a lengthy period of time.

Step 4 is start saving into an investment policy

5. I want to start a special account dedicated to saving for things that I cannot afford on my budget for example things like clothes, furniture basically luxuries. Here I can save up just a small amount every month, kind of like the piggy bank concept.

Step 5 is start a dedicated savings account to save up for things you desire

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