Month: February 2023

How can I reduce my weekend entertainment bills, realistically? Is there a percentage I should cap on entertainment spending?

How to Reasonably Reduce Weekend Entertainment Bills

Most experts will advise that you allocate between 5-10% of your net income to entertainment, however, how much you should spend in most cases depend on your disposable income. This is how much you have left after all your important needs are taken care of. Entertainment is difficult to completely get rid of since they make life worth living, but how can we go about having it without breaking the bank?

Start With Needs

Spending money wisely involves identifying the "must have" and the "extras" and allocating money to each reasonably. The "must-have" includes things you need for survival such as bills & food, "extras" refers to entertainment or things you can do without but add value to life either by making it fun or comfortable.

Create a Financial Budget

Coming up with a budget as the best way to determine how much you can afford to spend on the "extras". A budget is not something you come up with overnight; it requires that you track your expenditure over a while and identify and list the recurring expenses. After identifying these expenses, put aside money spent on them. For instance, if after-tax and other deductions, your salary is KSH 50,000, and the list of your recurring expenses is as follows:

• Rent: Ksh 15000

• Food: Ksh 5000

• Electricity: Ksh 1500

• Water: Ksh 1000

• Utilities: Ksh 2500

The total amount spent on the "must haves" is Ksh.25,000. The second step is to set aside money for saving and settling dues. Let's say your savings money is Ksh.10,000 and you owe Ksh.5000 in debt. You're left with Ksh.10,000. All essential needs, savings and other obligations checked, now we can talk about entertainment with the money left.

Planning For Entertainment

Sound financial management dictates that you need to spend as little as possible on entertainment and use the rest of the money on other personal growth projects. To maximize your entertainment experience and still spend less, here are some of the things you can do:

Find out what you love and spend on that

Entertainment can be very spontaneous and difficult to control. If you love outdoor activities such as game drives for entertainment, hanging out with friends or taking your family out over the weekend, try to confine yourself to spending on them. This will prevent unnecessary expenditure on impulse or the influence of peers.

1. Evaluate your entertainment options

We all have different ideas of what entertainment is, start by listing down what you consider to be “entertainment” and how much you spend on them. Your goal should be to minimize the amount spent on similar entertainment options. For instance, if you have access to streaming platforms such as Netflix and Showmax, while you also love going to the cinema for movies, you can pick the one that you spend more of your time on and make it your primary option for watching movies. Have this as part of your entertainment budget then eliminate the rest, it will help you spend only on what you use and be left with more money for other options.

After this exercise, divide the sum total of money allocated to entertainment monthly by four to know how much you can spend per week, this will let you know if you are within the parameters of what you can spend weekly or if you’re overspending.

2. Always go for deals

Remember you're trying to reduce the amount of money spent on entertainment, and deals are a perfect way to go about it. If you love dining out, match your day out with offer days for the place you want to go. For instance, you can intentionally go for a pizza date on Tuesday when you're sure to get what you want at a fraction of the regular price. Always be on the lookout for new places that offer your desired services because they will always have discounts.

3. Is it worth it?

In as much as you could love clubbing, dining out, game drives and charity events, money is more valuable when spent on something that adds to your life. In the same way success in life is measured through purpose, the value of money is measured through what it is spent on. So while creating your entertainment plan, have the expected outcome of the time spent in mind. Is it quality time with family, networking opportunities or recharging after an intense work week? This will give you good value for your money.

4. Increase your income

An extra source of income can help you maintain your entertainment needs without stressing about money, consider having a passive income that can help you cater for your entertainment needs and still have your basic needs taken care of.

Gloria Adhiambo is a Financial Trainer and Consultant on Retirement Solutions at Zamara. She can be reached via gawuor@zamara.co.ke

How can I change my money mindset? How can I change the emotional triggers for budget-breaking spending habits?

Don’t we all wish financial literacy was something we learnt in school, at least it’s being introduced to the new curriculum. How we view money is a journey that most if not all of us unfortunately stumble through, unless you have a mentor that guides you. The sad reality is that most of us start really learning about savings a lot later than we should, I mean we are all told saving is good and something that we should do but we never really grasp the impact that this has on our future until we are in our mid to late twenties and that’s if we are lucky most of the time it’s when we are in our thirties.

Fortunately this can be fixed and it’s never too late to change your money mindset, although there are a few prerequisites; first is a can do attitude just like with everything else in life you need to believe that your mindset can and will change but it is going to require self-discipline, budgeting, accountability, sacrifice, living below your means I could go on and on but you get it, it will take work, time and a sprinkle of grace for when you mess up because you probably will. I say a sprinkle because you don’t want to be too liberal with the grace that its sets you too far back from your goal. Your view of money also needs to change for example if you have a scarcity mentality you need to flip that to an abundance mentality. All these things have become easier to do especially with the vast resources we have now, whether through a life coach, online platforms, books, financial literacy classes and consulting friends and family that can nudge you in the right direction.

How can I change the emotional triggers for budget-breaking spending habits?

Emotions are a very common culprit of ruined budgets, and we have all fallen victim to emotional spending at one point. Triggers vary from person to person for example a bad day could lead to one of the biggest culprit’s retail therapy that is supposed to help you feel better but that’s not always the case, on the flip side there is need to reward yourself for an achievement.

This need to spend unnecessarily as a reaction to emotions can be changed, through proper budgeting where you don’t only factor in utilities, investments, savings, pension, debt repayment and all the other important avenues your money needs to be channelled to, to ensure financial success. You should also factor in money for entertainment, vacation and purchases that you want to make be it household or personal, that way you to get to reward yourself for all your achievements with a vacation or a purchase that is actually planned for instead of buying your tenth handbag while there are some in your closet that you haven’t made use of or purchasing your fifth watch just to add to the collection. Planned purchases are more thought through and mean so much more once you finally acquirhttps://zamaragroup.com/wp-admin/profile.phpe what you want.

Another trigger is sales and while they are good for your wallet when they are not sales scams, they still need to be planned for. Very often we see sales signs and we buy things that we don’t need or something that we do need but that purchase takes money out of your savings for the month, and we rationalize the purchases as ‘’I could not leave it because it was a really good price”. The truth is there will always be another sale probably with even better prices, so next time be patient and just wait to accumulate the needed amount.

All the best as you break bad habits and propel yourself toward financial freedom.

By Winnie Marangu wmarangu@zamara.co.ke