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7 Ways to Maximise Your Savings and Improve Your Savings Rate 
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7 Ways to Maximise Your Savings and Improve Your Savings Rate 

Living costs have been rising throughout 2023, making saving harder than ever. To achieve your immediate and future goals, you will need to maximise your savings and increase your savings rate. 

Maximising your savings provides peace of mind. Knowing you have a financial buffer and are on track to achieve your goals can reduce stress and anxiety during challenging economic times.

And importantly, maximising your saving during bad economic times can provide a financial safety net you need to weather uncertainties, cover unexpected expenses, or even take advantage to invest in opportunities that may arise. 

To maximize your savings, you will need to optimise and change your savings strategy to get the most out of your savings efforts. This article will explore eight ways you can do that.

Read Also: When I Started Working, I Used This Strategy to Save My First Ksh100,000 

Revisit Your Savings Plan 

The first step you need to take to maximise your savings is to review and reassess your savings objectives and strategies. This will inform you of your progress and, if you are behind, the adjustments you will need to make to catch up and avoid major setbacks. 

Life circumstances and financial priorities can change over time—factors like income changes, unexpected expenses, or new financial goals can affect your savings plan. Revisiting your savings goal helps you adapt to these changes. 

For instance, say you were saving Ksh40,000 for the December vacation, but prices have increased, and you will need Ksh50,000. Now, you will need to look for ways to cut expenses elsewhere in order to save an extra Ksh10,000 to accomplish your goals. This wouldn’t be possible without regularly revisiting your savings plan and making the necessary changes. 

Read Also: How to Create a Goal-Based Savings Plan

Review Your Budget to Cut Spending 

To maximise your savings and improve your savings rate, start by carefully evaluating your budget to identify opportunities to cut spending. This step will free up more disposable income that you can allocate towards your savings goals.

The budget cuts should not only include reducing your discretionary spending, such as shopping, eating out, and entertainment but also major expenses like housing and transportation costs. Adjusting your spending habits in these areas can lead to substantial savings and significantly impact your overall savings rate.

For instance, let's say your monthly income is Ksh50,000, and you are currently following the 50/30/20 budget rule

  • 50% (Ksh25,000) goes toward necessities.
  • 30% (Ksh15,000) is allocated for "wants."
  • 20% (Ksh10,000) is earmarked for savings.

Let's say you reduce your "wants" category by 10%, which means you're spending Ksh13,500 on wants instead of Ksh15,000. This frees up an additional Ksh1,500 you can direct to your savings. 

Read Also: 7 Places You Can Find Money to Save Every Month

Avoid Spur-Of-The-Moment Purchases

Spur-of-the-moment purchases, often referred to as impulsive spending, are unplanned expenditures made on a whim without much forethought or consideration. 

This type of spending can take various forms, such as buying items you hadn't budgeted for, grabbing a coffee or snack on impulse, or making big, discretionary purchases without prior planning. 

Impulsive spending can seriously impede your savings goals in several ways, including reducing the amount you save per month and disrupting your budgeting efforts. 

To avoid spur-of-the-moment purchases, you need to plan your purchases, practice delayed gratification, shop with a list, stick to your monthly budget, and prioritize savings. Doing this will help you save more money and develop good spending habits.

Read Also: 4 Money Resolutions To Build Wealth & Spend Less

Reduce Your Adjustable Rate High-interest Debt 

An Adjustable Rate Interest is a type of loan where the interest rate is not fixed but can fluctuate over time. These types of loans are often expensive, and as interest rates continue to rise in Kenya, the cost of servicing them increases. 

And when your monthly payments grow, it puts more strain on your finances. This added expense can severely impact your ability to save as more of your income is funnelled into debt servicing. 

Prioritising high-interest loans with fluctuating rates can often result in cost savings in the long run. First, these debts typically accrue interest at rates much higher than what you'd earn from savings. Second, as you pay off these types of debts, you free up more of your income, which can be redirected toward your savings goals.

Depending on your financial situation, there are multiple ways to get rid of adjustable-rate loans with high interest. For example, you can refinance or consolidate your debt with a fixed-rate loan to keep your interest rate constant. Additionally, you can make extra payments, increase your monthly repayments, or make a lump sum payment if your lender allows. 

Along with reducing existing high-interest debt, it's equally vital to avoid accumulating new debt. This practice ensures that you continue to have surplus funds available for savings rather than getting caught in the trap of servicing additional debts.

Read Also: How to Make the Most Out of Your Money Amid the High Cost of Living 

Consider Changing Your Saving Product

What might have seemed like a good deal when you opened your current savings account, especially when it comes to interest rates on your savings, may not be as good as what other savings products can offer you now.

Switching to a savings product with better rates can help you earn more interest on your savings over time, thus increasing your savings faster. Additionally, the new product might come with better compounding frequency and lower fees, all of which can help you grow your savings faster. 

When choosing a savings product, you should consider comparing different factors, including interest rates, fees, and account features. 

If you are looking for a traditional savings account, use the free Money254 comparison tools to compare different savings accounts offered by Kenya's top commercial and digital banks. 

Read Also: Starting Smart: Selecting the Ideal Savings Account for Your Early Career 

Consider Increasing Your Saving Rate by Just 1%

Your saving rate is the amount you save monthly as a percentage of your total or gross income. For example, if you make a total of Ksh65,000 from your primary job and side hustle and save Ksh11,000 monthly, your saving rate is about 17%. 

17% is good, but if you want to achieve your goals faster and improve your financial security, you have to increase your savings rate by at least 1%. Saving 18% of Ksh65,000 could take your savings to Ksh11,700 and increase your annual savings by up to Ksh8,400.

You might wonder how can a mere 1% increase in your savings rate make a significant impact on your financial future. The answer is BIG! Imagine if you repeat this circle each year and increase your savings by 1% as your income also increases.

This strategy can have a snowball effect on your finances. Over the years, it can mean the difference between struggling to reach your financial goals and achieving them comfortably. 

Read Also: How to Save More Money Faster in 2023 

Create a New Income Stream

When it comes to maximising your savings and increasing your saving rate, your earning ability is your most important asset. Making more money is the surest way to save more money.  

Whether you are underearning or have too many financial obligations preventing you from saving, increasing your income can solve your problem. 

There are a number of ways to increase your income, and Money254 has extensively written about them. Check out these articles: 

  1. Full-time Employed? 10 Simple Ideas to Make Money on Weekends 
  2. Top Profitable Side Hustles You Can Run Using a Smartphone Only 
  3. 10 Profitable One-Person Business Ideas to Try in Kenya
  4. Agri-Business Ideas That Are Making Kenyans Rich 
  5. Flipping: 20 Products You Can Buy And Easily Resell Online In Kenya 

But remember, the goal of increasing your income is to save more. Therefore, be sure to be on the lookout for lifestyle inflation as it is key to avoiding problems when you start making more money

Lifestyle inflation is the all-to-common tendency for your lifestyle to get more expensive and luxurious as your income increases. It can hinder your savings growth as any extra money you make could go into financing your lifestyle rather than going to your bank account. 


Maximising your savings and increasing your savings rate might not seem like a monumental change, but it can be a significant step toward a more secure financial future. To ensure you accomplish your goals, you must be consistent and develop good habits that can lead to longer-term savings success.

Consider making savings a priority and automating your savings. This will help make savings part of your routine. Finally, regularly review and adjust your savings plans to adapt to your evolving circumstances. 

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Farah Nurow is an experienced Content Writer who enjoys writing creative and educative articles meant to provoke readers' thoughts. He loves sunny weather and thick books. You can connect with him on LinkedIn.

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