Have you felt that you do not have enough money in your pocket? I know I have because I am not buying the same number of items with 1000 Kenyan shillings as I used to. This is leading most people to borrow thus finding themselves in large debts because they do not know how to manage debt. According to DW News, over 80% of Kenyans say they are suffering under the high cost of living and official figures show that the poorest people are affected the most.
Most financial analysts are blaming this on inflation and also high taxes. According to Kenya National Bureau of Statistics (KNBS) economic survey 2022, the average annual inflation rose to a 4 year high of 6.1% in 2021 compared to the inflation rate of 5.4% recorded in 2020. The situation took a turn for the worse with the inflation rate in August 2022 being at 8.5% according to the Central Bank of Kenya. The KNBS data on cost of living index showed that a kilogram of edible cooking oil rose by 47% year on year retailing at an average of 370.71 Kenyan shillings in major towns around the country compared to 252 Kenyan shillings in the same month last year. In addition to this, the Kenya Revenue Authority issued a public notice on inflation adjustment on specific rates applicable under the excise duty act and miscellaneous fees and levies act. This happens every 3 years and therefore the cost of excisable goods such as; cosmetics, petroleum products, alcoholic beverages, is expected to increase. This has already been seen by the cost of petrol hitting a new record of 179 Kenyan shillings a liter.
You have to brace yourself for the cost of living going higher than it currently is. The two main ways to survive the rising cost of living is by reducing the amount of money you are spending or making more money.
Reducing the amount of money spent.
For you to reduce the amount of money spent you have to track what you are currently spending. You may do this using an excel sheet or an application for tracking your spending. Once you know what you have spent your money on, then you can cut down the costs. You can do this by evaluating what is a need or a want. A need is something essential and very important. It is a necessity. For example, you need to sleep and eat, therefore you need to pay your rent and by groceries. A want is something you desire but do not need. For example, you do not need to go out and drink alcohol every night. This is a want that may be cut out of your budget. Once you can tell your need or want, then you can make a budget for all your needs. For this process to be successful you have to do it continuously.
Making more money
You can only cut down so much, but you will definitely need to make more money. You may do this by building a business, investing in forex, stocks or even bonds. For you to build a sustainable business, you will have to evaluate a gap in the environment and fill that gap.
