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.

@ 2012 LOL . and so far how are u doing

NSE is my saving account.

The ''Classical Saving culture'' which i define as letting the bank keep my money and pay me 1.45% while if i want a loan i pay 18% plus all sorts of fees is a culture which was never inculcated in me when i was young and growing up!

That said i vowed never to repeat the same mistake. My young children have bank accounts with over 5 zeroes charged by standing orders... i would rather fix it with an overdraft than not to charge their account.... the good thing with this accounts 'Kids' is that they have no charges at all but accumulate some stupidly ridiculously low interest but it sole purpos eis to take care of their educational and other needs. I also have a savings account which is the primary recipient of all the dividends paid but most of the time it is always in red!

All the free money goes to the NSE a 5 zero figure every two months from my checking account. This is what i consider my saving account (NSE Shares) because i can always liquidate and take cash in a week... When i need cash fast enough my credit card takes care of that. I have also developed a culture oof spending is via Credit Cards and paying my bills at the end of the month when i get the statement. Its my checking account dominating the proceedings and sorting out all the major expenses via standing orders.
Most people hate credit cards..... because of the wrong reasons...or because the media potrays them as such....credit cards just makes things easier and unlike a debit card i am cushioned against unauthorised transactions over the internet if the details falls to thugs..... i fell a victim once and i never paid a single cent from the fraudulent transactions amounting to 55K by the time i realised something when my card was rejected as i was shopping at Tuskys and called Visa only to be told that my card was being to purchase airline tickets plus hotel room deposits in Spain.

This is on net not gross. Never count paye it will never be yours but there are ways of reducing what caesar takes eg increasing your pension contribution to 20k and mortgage.
Speak to your accountants, they know things only gods know. Have you ever wondered how those accountants with average salaries have so many lucrative investments? Never tharao them, they know mathings.

20 year old student. parents not paul wanderi and martha stewart (though i wish they were) i save 1k a month and bottom feed on the nse.

AMEN!!