Want to save more money? Here are a few areas to look at.
1. Healthcare We all know someone who has been impoverished by healthcare costs. Some hospitals will not even admit a dying patient if ...
you do not make a down payment. So if one doesn’t have medical insurance, or a very well-padded bank account, you are basically at a loss. While reality dictates that once in a while we will need to visit a hospital, what can you do to manage costs?
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Well, visit government hospitals. Luckily, healthcare costs in public facilities tend to be lower than at private centres. Get your immunisation jabs and simple health checks from a public hospital. Also, get an insurance cover. “Before you buy insurance, take time and understand what you are buying. Compare the waiting periods, and compare the sub-limits that are applicable from different options. This will save you a lot of disappointments at the point of claiming,” says Eunice Mburu, the CEO of Bismart Insurance.
2. Housing Ideally, your housing expenses should not go beyond 30 per cent of your gross salary (before taxes). If it goes beyond that, you are either living beyond your means or you really need to increase your income to suit the lifestyle you want. The 30 per cent should also include associated costs like water and electricity.
3. Transportation Commute costs are a necessary part of everyday living, but important as they are, you need to ensure that you keep them as low as possible. SEE ALSO :How to start a business
Sometimes it makes sense to have a car, and sometimes it could be the cause for the negative number in your bank account. Before purchasing a car ask yourself a few questions: Do I really need the car? Evaluate if there are alternative modes of transport that you could use. Are they cheaper and convenient? Will the car increase your productivity and thus increase your income? Can you maintain the car on your earnings without borrowing or compromising on your savings? Maintenance costs include fuel and service costs. Can you buy the car without compromising your financial health? If you can afford to pay the entire amount at a go, that is perfect, but if you have to get a loan, think about how much you will have to pay back per installment and the interest rates. If the payment plan doesn’t hurt your savings and other investment plans, then go for it.
Carpool with neighbours
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Tip: You could also relocate closer to your work station. That way, you can cut down on your fare costs and maintain greater work-life balance.
4. Food How much money do you spend on your food? My guess is that it takes a large chunk. And if you have family, then the burden gets bigger. So in what ways can you lower this necessary expense? Cut down on how many times you eat out. Instead, pack your lunch or snacks to work. Cut down on processed snacks for the children. Instead, make healthier options at home, which is easier on the pocket and better for their health.
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Cook one meal a day instead of two. Many households cook only in the evenings and have the leftovers for lunch. This saves on money, time and fuel, and cuts food wastage by half.
5. Taxes Taxes are the bane of our existence, and unfortunately, there is no legal way to avoid them. That said, there are smart ways of cutting down the amount you pay to Caesar every month. Register with a mortgage firm to save towards a home ownership plan, for instance, and get tax exemptions. So not only will you be saving towards something worthwhile, but you’ll catch a break on your deductions.
Get a life insurance cover One is eligible for tax relief of up to Sh5,000 monthly for premiums paid on life insurance, education (with a maturity of at least 10 years) or health policies taken out for oneself or for one’s spouse or child. Doesn’t this sound better than your typical bank savings? You will need to apply for a tax exemption certificate. If you are living with a disability, apply for a five-year renewable tax exemption certificate that exempts you from paying about Sh12,500 from your income per month.
Get onto a pension scheme This is besides the mandatory National Social Security Fund (NSSF) scheme. Register with a recognised private pension scheme and as you save for your future, you will pay less in taxes.
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