Stretch that shilling

Friday November 3 2017

Do you know where your money goes? Audit your

Do you know where your money goes? Audit your spending by tracking where every shilling of your money is going for the next 30 days. PHOTO| FILE| NATION MEDIA GROUP 

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If ever there was a soundtrack for this year, “There is no money” would probably be it.

This year, money has been scarce, threats of job losses frequent, and pay raises rare.

People have tried to make do with increasingly inadequate incomes amid high prices of basic commodities. The good thing is that you can stretch your seemingly smaller pay cheque and make the most of the money you get. Here are some tips to help you do that:


Reset your spending priorities if you want your income to carry you from one pay day to the next.

Redefine your financial priorities to make sure that your money is going to the best possible use.

Make a list of your daily, weekly, and monthly expenses and scrutinise them. Which of them are needs (things you cannot do without) and which are wants (things you can do without for now)? For example, you do need to eat, but you don’t have to eat out.


Do you know where your money goes? Audit your spending by tracking where every shilling of your money is going for the next 30 days.

Review each day’s spending and see where your money went to needs (as defined above) and where it went to things you can do without at this time.

Cut out things like unused automatic subscriptions, especially online. Do you really go to that gym that you paying for? How often do you watch that video-on-demand service you pay for every month?

Auditing your spending will make you aware of things you can cut out of your spending plan for now, so that you can use that money on your new financial priorities.

This also means looking for cheaper alternatives, such as carrying lunch from home, instead of buying lunch at a hotel. Just be sure not to eat your lunch at 9am.


Now that you know what to cut out from your spending plan and your financial priorities, keep your spending in check using the envelope system. This means putting money for variable expenses into an envelope, especially those things that often go out of budget.

Allocate a specific, realistic and reasonable amount to each budget item, then put that amount in a labelled envelope.

For example, you can decide to allocate Sh6,000 per month to lunch. Take an envelope, write the word ‘office lunch’ on it and put Sh6,000 inside.

This is the money you will use on lunch in November. If you want that money to last all month, calculate how many lunches and nibbles that comes to, and work with that.

Perhaps Sh6,000 comes to 20 work lunches. When you need office lunch money, take it out of the work lunch envelope and carry it. It would be good if you broke down the Sh6,000 into Sh300s so that you only carry the cost of the lunch.

Any change goes back to the lunch envelope. Remember that once the November lunch money runs out, you cannot afford any more lunch and have to wait for the next financial month, so allocate your lunches wisely.

If there’s money left over in the lunch envelope at the end of the month, you can put it in the next month’s lunch envelope or transfer it to savings or a different budget item. To avoid keeping batches of money in the house, tabulate what is in each monthly envelope, then use weekly cash envelopes to control your spending.


You are now aware of how you are spending your money and have cut out unnecessary spending.

Next up should be becoming more prudent about how you use the things that your money is paying for. Audit how you use things like water, electricity, food, groceries. If you are careful about how things are used, that means less trips to the shop and less money leaving your pocket.


Bargains may look really attractive. If you buy something that usually costs Sh5,000 at Sh2,000, you didn’t save Sh3,000; you spent Sh2,000 that you had no plans of spending. In the same vein, you are also more likely to fall for con games when money is tight.

Be very alert, ask a lot of questions, get a second opinion from someone who is not invested in the “deal” and generally do your due diligence to avoid losing your money to con artists.


Remember, tough times don’t last forever, but prudent money habits will serve you for a long time.


Felista runs a money management group on Facebook, 52 Week Savings Challenge Kenya. You can email her on [email protected]