Mastering Management: Tips for Saving Money in Kenya

Saving money can feel overwhelming, especially when struggling to make ends meet. However, no matter how much or little you earn, everyone can develop a habit of saving. It’s important to note that having savings can serve as a safety net during emergencies, offer investment possibilities and alleviate stress. To make the process of saving money manageable, take into account the following advice designed specifically for your lifestyle in Kenya.

Understanding the Importance of Saving Money

If you’re beginning your journey, grasping the significance of saving money is crucial. So why is saving money important? Let’s delve into a few reasons:

  • Emergency Fund: A stocked savings account can be a financial safety net during life events.
  • Major Expenses: Saving enables you to plan for purchases, such as a car or a home, without excessive debt.
  • Peace of Mind: Having savings allows you to live on your terms and act as planned when things don’t go as planned.

Now that you understand the importance of saving money let’s explore some ways to embark on your journey with practical tips.

Practical Money-Saving Tips

Here are some useful tips to incorporate into your everyday life to boost your savings:

Cutting Down on Non-essential Expenses

Cutting non-essential expenses is a very effective and practical way to save money. These expenses are often optional and contribute to a lifestyle that may be more luxurious than necessary.

Steps to cutting down non-essential expenses:

  1. Evaluate your expenses: Look at your past transactions and categorise each as a need or a want. It may reveal certain patterns or unnecessary spending habits that can be controlled.
  2. Make a budget: After evaluating your expenses, make a budget that factors in all your necessary costs and leaves some room for your wants. Remember, the aim is to save, so limit your desires to a comfortable extent.
  3. Stick to your budget: It’s easy to create a budget but requires discipline. Keep track of your spending and constantly remind yourself of your saving goals to keep motivated.

Let’s look into common non-essential items you spend on and how much you could save by reducing or avoiding these spends. 

Non-essential itemsPotential savings
Eating out frequentlyKsh 3,000 – Ksh 5,000 / month
Unplanned shoppingKsh 2,000 – Ksh 4,000 / month
High-end electronicsKsh 10,000 – Ksh 20,000 / year
An organized table helps you have a complete view of expenses and where you can cut costs.

The above table is a potential saving estimation should you cut back on these non-essential items. While it doesn’t spell doom to indulge in these items occasionally, being conscious about your expenditure on them helps you make steps towards your saving goal.

Smart Shopping Tips

If you’re striving to manage your money better, fret not! You’ll find here some simple but effective tips for smart shopping – proven to help you maximise the value of your income. These practical tips, particularly useful for young Kenyan professionals, can be easily incorporated into your everyday life.

1. Prioritize Needs Over Wants 

One of the primary steps towards smart shopping is differentiating between needs and wants. A need is something you rely on daily, like food and rent. On the other hand, a want is a luxury—you can live without it. 

Always buy needs first. Wants should only be considered once your essential costs are covered, and you still have some money left.

2. Plan and Budget 

Create a shopping list before hitting the store. This list keeps you focused and prevents you from making unnecessary, impulsive purchases. 

  • Create a monthly budget: Allocate specific funds to different needs.
  • Stick to your budget: Resist the urge to overspend
  • Keep track of expenses: Documenting your expenses will help you understand your spending pattern and identify areas to cut back.

3. Compare Prices 

Remember, retail prices can significantly vary from one store to another. Therefore, comparing prices before settling on a purchase is a good idea.

ItemStore AStore BStore C
MilkKsh 50Ksh 52Ksh 48
BreadKsh 48Ksh 50Ksh 46
Where possible, compare prices from shops and supermarkets. This will make a huge difference to your monthly budget.

4. Shop Big, Save Big 

Consider buying in bulk. Items purchased in larger quantities often cost less. However, ensure that these items are non-perishable or that you’ll consume them before expiration.

5. Embrace Seasonal Sales and Discounts. 

Every once in a while, stores will have seasonal or clearance sales. Taking advantage of these can help you save a significant amount of money. Implementing these strategies will transform your shopping habits, leading to consistent savings. Remember, it’s not about depriving yourself but making conscious, smart decisions about where your money goes. Happy shopping!

Saving on Groceries: Meal Planning and Couponing

For most people in Kenya, one of the most effective ways to start saving money is through your grocery budget. Below are some practical ideas you can use daily:

1. Meal Planning 

Meal planning is a great way to save money on groceries.  Here’s a step-by-step guide: 

  1. Check Your Inventory: Before going to the store, check what you already have. This can help you avoid buying items you do not need.
  2. Plan Your Meals: Make a list of meals you want to prepare for the upcoming week. Be sure to plan for breakfast, lunch, dinner, and snacks.
  3. List Your Ingredients: Once you have your meal plan, make a shopping list of all the ingredients you need.
  4. Stick to Your List: Only buy the items on your list when shopping. This can help to avoid impulsive buying.

2. Couponing 

Another great way to save money on groceries is by using coupons. Below are some of the ways to get started: 

  • Apps: Download grocery shopping apps that offer coupons and discounts.
  • Newspapers: Check local newspapers for grocery coupons.
  • Pamphlets: Some stores offer pamphlets at their entrances with current deals and coupons.

Note: Avoid buying items just because they are on discount when using coupons. If it’s not something you typically use, believing it just because it’s on sale won’t save you money.

3. Price Comparison 

It’s also important to compare prices between different stores. Here is a simple table showing how much you can save by comparing prices:

ItemStore A Store B Store C Average Savings
Rice (1kg)120 Ksh110 Ksh115 Ksh5 Ksh
Bread (loaf)50 Ksh48 Ksh52 Ksh2 Ksh
Milk (1l)100 Ksh95 Ksh98 Ksh4 Ksh

By using these simple strategies, you can significantly reduce your grocery expenses and boost your savings. Remember, every shilling you save counts towards your overall financial goals!

Taking Advantage of Cashback and Rewards Programs

Looking to make the most out of every shilling you spend, cashback and rewards programs can become your best allies. They turn your expenditures into an investment and make shopping a rewarding experience.

Understanding Cashback and Rewards Programs 

Cashback and rewards programs are strategic initiatives that companies develop to encourage repeat business and customer loyalty. Cashback programs work by reimbursing you a percentage of your purchase total as a reward. In contrast, rewards programs grant points or credits for every purchase, which can later be redeemed for discounts, freebies, or other perks.

These programs aim to incentivise you to continue using the company’s products or services. While the benefits may seem small initially, they can add up over time, potentially leading to significant savings.

How to Maximize the Use of Cashback and Rewards Programs? 

To fully take advantage of cashback and rewards programs, you need to have a strategic approach. Here are a few tips:

  1. Understand the Program: First, thoroughly understand how the program works. This means reading the terms and conditions and knowing how you earn rewards, any limitations, and how to redeem them.
  2. Choose: Once you’ve identified the best programs, stick to two or three. Juggling too many can make tracking your benefits challenging.
  3. Take advantage: Always check for current promotions or additional reward opportunities before spending.
  4. Redeem: Remember to check your rewards balance regularly and redeem before they expire.
  5. Use Regularly: The benefits of these programs increase with repeated use. If you frequently shop at a particular store or use a specific service, enrol in their cashback or rewards program to start accumulating benefits.
  6. Pay on time: If the program is tied to a credit card, ensure you pay your bill on time. Late payment fees can outweigh any cashback or rewards earned.

Remember, it’s essential not to overspend to earn rewards. Use these programs to save on purchases or services you would acquire anyway.

Popular Cashback and Rewards Programs in Kenya 

ProgramType of Reward
Safaricom’s Bonga PointsData, Call time, SMS bundles
Nakumatt’s Loyalty CardShopping vouchers
Airtel’s Zawadi PointsData, Call time, SMS bundles

To get the full benefit, keep in mind that cashback and reward points should not dictate your purchasing decisions. Rather, they should merely boost the value of your necessary spending. The saying “Look after the cents and the shillings will look after themselves” rings especially true.

Saving on Banking Fees: Choosing the Right Bank Account

Managing your money wisely starts by saving on banking fees. You may not realise it, but those little charges and fees can accumulate to a large sum over time. Knowing how to navigate these fees can significantly impact your savings.

  • Consider Banking Options Carefully

Locking onto the first bank you encounter is often not the best choice. It’s essential to compare different banks’ options, fees, and services before deciding. A little research can save you a significant amount of money in the long run. This includes some online banks that offer remittances with low to no fees. Remember, your right bank account depends on your needs and circumstances. Finding a banking solution that matches these without incurring unnecessary costs is crucial.

  • Understand the Fee Waivers 

Traditional banks often offer ways to waive certain fees, like monthly maintenance or ATM withdrawal fees. Common waiver conditions include a minimum account balance, having a certain number of monthly transactions, or setting up direct deposit. Familiarise yourself with these rules to avoid falling into the fee trap.
An example of how bank account features and fees might look like is outlined in the table below:

Bank Account
Common FeesWaive Conditions
Monthly maintenance$15Minimum balance of $1000
ATM withdrawals$3 per withdrawalNo fees for in-network ATMs
Paper statements$2 per statementOpt in for e-statements
  • Limit ATM Withdrawals

Wherever possible, limit your ATM withdrawals to your bank’s ATMs. This avoids unnecessary charges that come with using out-of-network ATMs. An alternative is to choose banks that reimburse ATM fees.

  • Opt for Online or Paperless Banking Services

Many banks offer discounts or completely waive certain fees if you opt for electronic statements instead of paper. Apart from saving money, you’re also contributing to protecting the environment. Similarly, performing transactions online or via mobile can often save you from fees associated with in-person services.

Keep these tips in mind as you go about banking. You can save quite a bit with due diligence and smart banking habits. Every shilling saved is a shilling added to your financial security.

Ditching Expensive Habits: Smoking, Drinking, and Eating Out

When saving money, examining your habits is a great place to start. You’d be surprised how much you could save by making a few small changes to your lifestyle. Let’s dive deeper into some areas you might want to consider.

Cutting Down on Smoking 

For smokers, this could be highly challenging yet rewarding. But remember, every cigarette you don’t buy is saving you money. 

  • Calculate the cost: To start, figure out how much you’re spending on cigarettes each week, each month and each year. The total might surprise you.
  • Quit gradually: If going cold turkey feels impossible, consider progressively reducing the number of cigarettes you smoke daily. Each reduction saves money.
  • Find support: Quitting smoking isn’t something you have to do alone. There are numerous support groups and resources available that might make the process easier.

Reducing Alcohol Consumption 

Like smoking, drinking can also become an expensive habit. Here are some tips to help you cut back and save:

  1. Set Drinking Goals: Decide how many days a week you want to be alcohol-free. Commit to it and stick to your plan.
  2. Opt for cheaper alternatives: Consider cheaper brands or drinking at home instead of at a bar.
  3. Buy in bulk: When possible, buy alcohol in bulk to save money in the long run.

Eat Out Less 

Eating out can certainly feel convenient, but it can strain your budget. Instead, try:

  • Cook at home: You’ll be amazed at how much you can save by preparing your meals at home.
  • Batch cooking: If you’re short on time during the week, try batch cooking. Prepare and cook your meals in advance, then freeze them. This not only saves money but also time.
  • Taking packed lunch: Taking your lunch to work instead of buying it can result in significant savings over time.

Subscription services (Internet, cell phone, cable TV, streaming services)

At first, $5 for a movie stream, $10 for an online music service without advertising, $25 for the gym you pay for but won’t… all of this adds up to the bill. Analyse the needs of each one and cancel those that you do not use or are unnecessary.

Savings on Energy Bills: Tips for Reducing Electricity Usage

Energy costs can consume a significant percentage of our monthly earnings, especially if we’re not mindful of our consumption habits. Fortunately, numerous ways exist to reduce electricity usage around the house without sacrificing comfort. Here’s how:

Optimize for Energy Efficiency: Invest in energy-efficient appliances whenever possible. They may be a little pricier upfront, but the cost savings are worth it in the long run. Moreover, they are more environmentally friendly. 

Note: Look for the Energy Star rating on appliances. The higher the star rating, the more energy-efficient the machine.

Use Natural Light: Take advantage of natural light as much as possible during the daytime instead of turning on your lights. This is not only good for your pocket but also beneficial for your health.

Unplug Unused Devices: Many devices continue to draw power even when they’re turned off. If you’re not using an appliance, unplug it to save energy.

Regular Maintenance: Regular maintenance of your electrical appliances can help them operate more efficiently and last longer, saving you money in the long run.

Use Efficient Bulbs: Consider switching to energy-efficient bulbs such as LEDs, which consume less electricity and last longer than traditional bulbs.

Practice Energy-Efficient Habits:

  • Turn off the lights when you leave the room.
  • Cook with the lid on to reduce cooking time.
  • Limit the use of heating and air conditioning.

Here’s an illustration of how these simple habits can have a significant impact on your electricity bill: 

ActivityEstimated Monthly Savings
Using energy-efficient
Unplugging unused devices5%-10%
Maintaining appliances5%-15%

Remember, every little bit helps when it comes to saving money on your energy bill. By implementing a few of these practices, you can significantly cut your electricity expenditure and have more money to put into monthly savings.

Get informed on how to do more with your money.