Many people have to find ways to stretch the little money they have due to rising inflation rates, income stagnation and higher costs of living. As everything becomes more expensive, you’re more likely to lose a source of income than get a raise. It’s important to stretch money to have some savings and funds to use in the event of an emergency. Smart budgeting also helps you avoid losing your house, debt, and having no money at all.
How to stretch your money when you’re broke
1. Track your spending
To know where you need to make changes, start with monitoring your expenditure. Using mobile money or a debit card, it’s easy to forget what you’re spending on. Try to make the effort to write down everything you spend money on. You can classify items together, like breakfast essentials or eating out, to ease your efforts. At the end of the month, see what you spent your money on and where you can cut back. You may have been spending extra money on items you don’t need or in a way that costs you more in the long run.
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2. Keep a budgeting plan
A budget gives you a strict guideline on what you can spend your money on. Planning one helps clarify where the bulk of your expenditure should be. The rule of thumb is to divide your income by 50-30-20, where 50% goes to utilities such as rent and bills, 30% goes to nonessential needs, and 20% goes to savings. But this isn’t always applicable to everyone. You may have a source of income that doesn’t leave you with enough to save or have specific needs. A budget helps you stick to one way of spending and reduces instances of wasting your money.
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3. Use cash
When you get your income via a mobile wallet or bank account, cash out a practical percentage for your monthly use. You can take out the necessary cash after tracking your spending and setting a budget. Spending cash can help you reduce your physical spending than using mobile money or a debit card. In addition, having a visual of your cash keeps you more aware of your spending habits.
4. Use lists
Every time you go shopping, list everything you need from most important to least. When you’re making your purchases, prioritise the essentials. If you’re still within your budget, you can buy the non-essentials. But don’t buy items outside the list. An excellent way to ensure this is to carry the exact amount of money that you need and avoid using overdraft or loan services to furnish extra purchases. If you do forget something on your list, unless it’s absolutely essential, try to forego it until your next shopping run.
5. Save up your change
Whenever you pay for items and have a little money left, try to start a small savings jar in your house. It can be that you save every Ksh 50 note that you get or every Ksh 40 coin. Check how much you’ve accrued every few months or every year, then redirect that money to your savings, or you can spend it on something you have been waiting to buy, such as a nice pair of shoes.
6. Stay away from sales
Seasonal sales offer tantalising bargains. But sometimes those sales are gamed. A store can say that a phone used to be Ksh 30,000 and is now going for Ksh 25,000. This looks like you’re saving money when in fact the phone has always been Ksh 25,000. Clearance sales also give a sense of FOMO (fear of missing out). However, you should stay away from such sales. When you spend money, you’re not saving any. If you have an item you wanted to buy at a bargain, check how much it costs in multiple stores and save money while waiting for a legitimate sale.
7. Choose cheaper brands
Don’t remain loyal to brands that have price increases on a daily. When doing shopping, opt for more affordable items. You can also make purchases that can save you money in the long run. You don’t have to buy that highly-priced toothpaste or lotion. Sometimes name brands have significantly higher prices yet the brands that are not well known are cheaper by significant amounts.
8. Cut back
Some items aren’t necessary for your survival. When you look at your expenditure, check for what you can remove from your expenses to save up more money. For example, you can remove bread from your diet and eat supper leftovers with your morning tea. You can also reduce how often you have meals out and eat at home more often.
Read also: 7 Budget Cut Ideas For Those Trying To Save More Money
9. Reduce
Power and water costs are ever-increasing. Try to reduce how much water you are using each day. If you leave the tap running while doing the dishes, shut it off until you need to rinse. Unplug devices you aren’t using and keep lightbulbs off when leaving a room. You can also use energy-saving bulbs to reduce how much energy you consume. Energy Saving Tips For Your House
Check out:
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