7 Smart Money HABITS YOU CAN USE Even With a LOW INCOME

Learn simple ways to budget, avoid debt, save, and track expenses even with a small income.

Lack of financial discipline is not relevant to the income you earn. 

Challenges such as not having a budget, not having savings, not being enough to spend, or even a chain of debt payments is faced by



high-income earners and low-income earners alike.

Do you know the reason why?

It’s because financial discipline is a matter of habits. And you are the one who builds the habits, if you desire so.

The FinScope Tanzania Report of 2023 has shown that…


66% of Tanzanians find it challenging to afford the normal costs of living.

But also, 

Savings is a priority after earning for only 4% of the surveyed people while,

expenses (excluding food and clothes) is a priority to a whooping 77%.

Now, without wasting your time, let’s start with


Budget habits,

1. Distinguishing between ‘needs’ and ‘wants’

Wants are often more expensive than needs, and


you will be more motivated to spend money on wants than on needs.

You already know that needs are essentials; food, transportation, accommodation, communication.

2. Track expenses even if it’s just once a week.

The kind of budgeting for every shilling you earn is ‘Zero-Based Budgeting’.

If you track your spending for at least a month, it is easy to know where your weaknesses are.

Example;

If your income is 600,000/= per month, you will know where your money goes when the month is over,

…where to reduce and where to improve. The numbers will give you the answers.

3. Savings BEFORE spending and not saving after spending.

On saving habits,

Example;

If your income is 600,000/= per month, set aside at least 10%, 60,000/= then start planning for the remaining 540,000/=.

It will become difficult for you to save enough once you start spending the money as soon as you receive it.

4. Avoid peer-spending; spending money to be seen or to please other people.

On expenses,

If your colleagues are going for an outing that you can’t afford, don’t be ashamed to admit it…

because it’s beyond your limits ‘at that moment’.

If other people’s contributions are beyond the 50,000/= you can give at that moment, 


there is nothing wrong with giving what you can at that time.


When you spend money for people to see, you will ache and they will not see.

5. Not using more than 30% of your income for accommodation,

If accommodation costs such as rent, electricity, water, sanitation and security are high compared to your income,


you will struggle with other expenses.

For example;

If your income is 600,000/= and you spend more than 180,000/= for housing per month, it can be difficult


for that income to get you through the remaining month.

6. Look for opportunities to elevate your income and have financial goals.

In other words, don’t settle for where you are at the moment.

Being pitied and complaining has never saved anyone, except getting sickness from mental distress.

So many people are born in poverty but do not die poor. If thats your background, see yourself as one of them.

There is a very good quote that says,

You are born looking like your parents, You die looking like your decisions

Go for what you desire to achieve. There is no one to do that for you but you.

7. Avoid debt by reducing non-essential spending and have savings that will help you when sudden challenges arise.

Most loans are taken for personal use, not investing nor economic productivity.

We borrow to,

✔ dress well, 

✔ change interior furniture, 

✔ buy exotic cars, 

✔ travel, 

✔ cover emergency expenses, 

✔ contribute,

✔ pay school fees,

✔ give to relatives and friends who are not disciplined with their own money,


but in all of the above, neither one earns you money.

There is nothing wrong with all the above


but then, find a way to increase your income while doing it moderately.

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PS: 

You are born looking like your parents, You die looking like


It’s not too late to start!

All the best.

Money-ly Yours,

Gracing Money!

References:

1] FinScope Tanzania 2023 Key Findings Launch, 10th July 2023, Bank of Tanzania Auditorium

2] FinScope Tanzania 2023

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Grace Sambali
Grace Sambali
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