Saving the whole 40% may be too ambitious for most people...

60%...live on
10%...invest long term
10%...save short term for major/recurrent expenses e.g school fees, insurance, household items etc so that you avoid short term loans and credit card debts
20%...Use to pay debts....If/once debt free, save long term.

Avoid trying to keep up with the Joneses...they are in debt upto their necks!!

Make savings a part of you budget. Never imagine you will save what is left after 'other expenses'. It will never happen. Parkinson's second law states: "Expenditure rises to meet income" (You can Google this for more details).

The trick is simple. Starting this month, decide how much you want to be saving every month - a percentage of your salary is better so that your savings can rise with your income. Open a separate bank account and be depositing that amount in that account as soon as you get your salary. Better yet, organize with your accountant to deduct the money at source and send it directly to that account. Use the money in that account for investments only - NOTHING else! This is where you need discipline. And don't get an ATM card for this account!

As for the rest of your expenses, they have to be within the remaining amount. You will definitely need to re-evaluate your expenses and cut costs.

Word of advice:
1.) Raise your savings by a higher margin than your increase in income. For example if you decide to be saving 20% of your salary and your income increases by 10,000/= for example, don't increase your savings by 2,000/=. Go for a higher amount say 4,000/=

2.) More than half of your windfall income - bonuses and other one-off incomes - should go to savings/investments.

3.) Don't let your money 'rot' in the bank. Aggressively look for investment avenues where your money can work for you.

4.) No matter how much (little) you earn, you must save. And never belittle your savings - Haba na Haba hujaza kibaba. If I earn 10k and save 1k or 500/= it might seem little at the beginning but don't forget the eighth wonder of the world - the power of compound interest! Gospel by one Albert Einstein.

Read this short article - Example of compound interest at work

Whereas I don't actively save, but put money into any "project" that comes my way I like the thoughts @Dod and @Maichblack list. One month I may put all my remaining income after recurrent expenditure into paying off some kashamba, sometimes there's nothing to invest in. I guess it's time I try out a kind of a savings scheme since if something doesn't come up I find I use up everything.

@Ngatts

I think keeping money aside consistently is the key. Its the so called principle of paying yourself first. This money can be in form of sacco shares or even repaying a loan for a kaplot somewhere!

Which bank are you with? My bank charges 400bob for per standing order and I cannot join those banks that have a monthly fee.




I tried it and it works but it's a struggle. I need to make some lifestyle adjustments for it to work consistently e.g move to a cheaper area code and obey the Mututho rules.

60/40 of 100k example;

The 60%
Rent 20k
Expenditure 20k
Entertainment 10k
Transport/misc 10k

The 40%
Tithe 10k
Short term savings 10k
Long term savings 10k
Emergency kitty (six month survival) 10k

The Loans
In this concept these payments will obviously come from the 40%. Pay your tithe and use the other 30% to pay off your loans. As the good book says if you have debt you are servant to your lender.