It is that time of the month again. Your salary has kicked in and your phone has been buzzing non-stop with friends trying to make plans for the weekend. The temptation is kicking in, should you go for a drink (let’s be honest, 5 drinks) with your bestie, or save for your new phone instead?
Overspending on payday is no different than a wild night out. Super exciting and rewarding in the moment, but something that you might regret in the future. This is why we have put together some simple tips and tricks to prevent you from falling into this trap every month.
If you are counting your change at the end of every month, this guide is for you!
1. Pay off all recurring bills
First things first, pay off all your bills- this includes rent, electricity, internet, water, and other utilities. The longer you wait to do this, the more painful it will be.
Once you have taken care of the essentials, everything else in your bank account is fair play. You can do as you want with it, responsibly of course!
2. Pay yourself
Once you have paid everyone else, it is time to pay yourself! As a rule of thumb, at least 20% of your salary should go into savings. You can save in a piggy bank, with a bank, or with Koa!
With Koa, you can create specific goals that you would like to save towards (e.g. travel, school fees, medical bills), and we will tell you exactly how much you need to save to achieve your goals in time. And better yet, we will reward you for saving! That’s right, You will earn an interest rate of up to 10% on all your savings with Koa, so your money will grow with time and you will be able to see this on a daily basis on our app.
Don’t have a goal that you are saving towards? That’s perfectly fine as well! You can use our Quick Save feature to begin your savings journey and enjoy the same interest.
If you are thinking that you don’t have enough money to save, that is not the case at all. You can deposit as little as Ksh. 100 with Koa. No amount is too little to start saving with Koa.
3. Create a budget
Now that you have taken care of all the important things, you need to create a plan for the rest of your salary. This will include your needs; things that you need for survival such as food or transport fare, and your wants, like that treat you have been eyeing for the past few months!
Make a list of all your foreseeable expenses, and put it on paper so you can review it at any time. Colour code your different expenses so you can keep track of how much you are spending on what.
And most importantly, stick to it! This is the hardest part about budgeting, but also the most essential.
4. Track your expenses
Once you have your budget in place, keep an eye on it all the time. If you end up spending more than you expected on something, see how you can balance it out by cutting down on something else. See how you can achieve the same result with a less expensive alternative.
A savvy hack is to have people over for a potluck or a games night instead of going out to eat! You still get to meet your friends and family, and have a great time, at a fraction of the cost. Look through your budget and see how you can better manage your expenses.
5. Sleep on it
How many times have you bought something only to realize that you are not as happy with it as you had thought you’d be? This is why it is extremely helpful to wait a day or two before you make an impulsive purchase. Delayed gratification helps tremendously with cutting down your expenses on items that are neither necessary nor fulfilling.
Oftentimes, you will wake up the next morning realizing that you didn’t need that item as much as you thought you did. If not, then you can make a plan to purchase it in a way that will not leave you penniless.
Are you ready to start saving smartly?
The best time to make saving a habit is now, don’t let it be an afterthought!