Majority of Kenyans live below the poverty line, earning an amount that is too little to make much from. If this is the case, can people in this bracket save money?
If those earning above average find it hard to get out of debt and build on savings, imagine how hard it is when you are making minimum wage. The only way through which you can achieve some financial success while earning little is through cutting down on costs.
I was in extreme debt sometime back and no matter how hard I tried to budget my income, I was never left with enough to settle the debt. That was until I discovered the impact that cutting down on costs has on my overall financial status. I can proudly say that I am now out of debt.
If you earn minimum wage, you have no other alternative but to reduce your basic expenses. My top recommendations for cutting costs quickly include:
• Housing is the biggest expense on most budgets. Finance experts advice that your housing costs shouldn’t be more than 30% of your net income. This means that a minimum wage earner might be forced to move to the slums, find a cheap room to rent, share an apartment with a friend, if worse comes to worst move back to their parents home.
• Transportation is another huge expense. It will cost one about KES 200 to commute from Ngong road to Embakasi. KES 200 may not look like much but to a minimum wage earner it is a considerably huge amount. If I were making minimum wage, I’d rather walk to areas that are accessible by foot or buy a bicycle. Riding a bicycle is actually one of the cheapest modes of transport, plus a bicycle’s maintenance costs are relatively low. I am considering the options of getting myself one.
• Food can chew up the cash. Rather than buying vegetables from the kiosk, go to Gikosh. You will buy food there at a relatively lower price and make a huge saving while at it.
• Lastly, reduce on the recurring monthly expenses. Don’t subscribe to pay TV if your budget cannot support. These expenses are like anchors, especially when your income is limited.
By doing the above you will lower your expenses probably end up with a surplus which can be saved.