How to commence saving for a rainy day
Picture the profound regret of realizing you squandered valuable time believing you were too young to sow the seeds of financial security, only to find yourself stranded in a perpetual cycle of destitution.
In today’s fast-paced world, financial literacy is an indispensable skill for youth navigating the complexities of adulthood.
Whether it’s pursuing higher education, starting a business, or simply building a safety net for unforeseen circumstances, the ability to manage finances wisely is crucial.
Here are some ways Kenyan youth can start saving for the future:
Opening a savings account:
As a youth, you need to open a savings account at a bank or a financial institution.
It is important to recognize the value of opening a savings account at a bank or financial institution, irrespective of age. Poverty doesn’t discriminate based on age, and the benefits of having a secure financial foundation apply to everyone, regardless of their stage in life.
Many banks offer accounts specifically designed for young savers with low minimum balances and no monthly fees.
Setting clear financial goals
Setting clear financial goals as a youth involves identifying priorities such as education, travel, or savings, and making them specific, measurable, and realistic within set timeframes.
By considering the costs associated with each goal and regularly reviewing and adjusting them as needed, youth can stay on track towards achieving their financial objectives. Seeking support and accountability from trusted individuals further enhances the likelihood of success.
Creating a budget
This involves first understanding your income sources and expenses.
Begin by listing all sources of income, including allowances, wages, or any other earnings.
Next, identify and categorize your expenses, such as food, transportation, entertainment, and savings.
Differentiate between fixed expenses like rent and variable expenses like dining out.
Set spending limits for each category based on your financial goals, ensuring that your total expenses do not exceed your income.
Regularly track your spending and adjust your budget as necessary to maintain financial stability and work towards achieving your goals.
Automating savings
You need to set up automatic transfers from your checking account to your savings account on a regular basis.
This ensures that a portion of your income goes towards savings before they have a chance to spend it.
Exploring high-interest savings options
As a youth you need to explore savings options that offer higher interest rates, such as fixed deposits or savings bonds.
While these may require locking in funds for a specific period, they can yield better returns over time.
Utilise mobile banking and fintech Apps
Youth can effectively manage their finances by leveraging mobile banking apps and fintech platforms that offer innovative savings features.
Introducing these tools enables you to seamlessly track expenses, set savings goals, and automate contributions to their savings accounts.
With features like round-up options, where purchases are rounded up to the nearest dollar and the spare change is deposited into savings, or savings challenges that gamify the saving process, these apps make saving both convenient and engaging.
Also read: Senator Orwoba criticises MCSK’s Ezekiel Mutua over Embarambamba ban