Let’s face it, no one likes being broke, especially when you are earning a salary. I mean, that’s the point of having a job, right? Well, that and career development or exploring your passions.
Earning an income helps you afford things you want and need in life while allowing you to take care of yourself and your loved ones. However, even though you may be getting a salary every month, you might find yourself living paycheck to paycheck sometimes. After paying your bills and buying groceries, you barely have enough money left over to last you till the next payday. Or as this tweet hilariously put it:-
Your money should work for you and not the other way around. So what can you do to make sure you’re not always broke after payday? Earning more money is definitely at the top of the list. You can look for a side hustle that can help you earn some more money on the side in addition to your main source of income. You can also negotiate a salary increase with your employer. Then again, when you’re earning a salary, it’s also important to learn how to save money and invest.
Chris Rasugu
Chris Rasugu, the Managing Partner at NewQuest Consulting, a consulting firm in Nairobi, has useful tips on this subject. Below he shares some beneficial insights on investing and personal finance to help you maximize your income, regardless of how much you earn.
Spend less than you earn
Try as much as you can to live below your earnings. This means meeting all your desires within your income. Remember, we often have cheaper alternatives as much as we also have expensive options. With this in mind, there is nothing like too little money- it’s all about how you plan for it.
Spend on necessities, not wants and avoid debt
Differentiate between wants and needs. Make sure your cash goes to meeting a cost, investing and improving your net worth. Also avoid debt, especially on things you could save and buy. If you have to take a debt, then do so on an item whose value will be higher than the interest when the debt is settled.
Have a saving mentality
Whatever your current level of income, try and put some money aside for a rainy day. You can put a part of your income into savings. You can also save through SACCOs while earning dividends at the same time.
Invest and look for investment opportunities
Regardless of your income level, always look for opportunities to invest. This can be through stocks, bonds, mutual funds etc. Investing has a small and compound effect of multiplying your funds and increasing your wealth. Be curious, read widely on investment opportunities, and seek them out from people who have succeeded in the same then build your investment portfolio with patience.
Caution: Stay away from quick cash schemes - the downside or loss of funds is often very huge.
Look for ways to increase your revenue streams
This is the ultimate way to become self-sustainable. Once you can get extra cash from other ventures, then retention, saving and investments will become easy. Having several income streams is an easy way to grow your wealth.
Make sure you have health insurance
Unexpected sickness, whether it is you or your family, can drain your funds if you are not prepared. Plan for this in your savings and have a good medical cover if this is not provided by your employer.
The main takeaway from this is the importance of saving for a rainy day. Doubling or even tripling your income streams with a side hustle or two can also give you a financial edge. Once you learn how to save money and invest, you’ll be well on your way to boosting your finances.
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