The high cost of living has become a global crisis and has nearly affected every aspect of our lives. Different people have had to come up with ingenious ways to survive by cutting down expenses and increasing their savings to cater to the increasingly uncertain future.
At a personal level, I have taken up the November Challenge which I have convinced my friends and colleagues at Money254 to participate. Here is how I plan to save Ksh25,700 of my personal and household expenditure.
The plan does not take away any basic needs - food, housing, education, and healthcare. However, I have cut down on all discretionary expenditures - and will try to cut them down by half.
There is no fixed formula on how to cut them and each person joining the challenge can make bespoke adjustments according to their current expenditure and the things they wish to do away with. The goal, however, is to reduce non-essential expenditure as we prepare for the festive season - and with the full realisation that this January may be harder - given the trend in the rise of the cost of living.
My monthly entertainment budget is Ksh16,000. I spend an average of Ksh4,000 per weekend and I have planned to cut this to Ksh8,000 in November. Most of my entertainment expenditure usually includes drinks and eating out on weekends.
On Fridays, I visit my favourite nightclub with my friends. We spend about Ksh1,500 each on drinks and another Ksh1,000 on food.
My spouse and I host a few friends or family on Saturdays for lunch or dinner, where we spend between Ksh1,000 to Ksh1,500. In November, I have planned to cut down my entertainment budget as follows:
I will go to the nightclub bi-monthly - two weekends a month instead of four. I have also suspended meal plans in the club and will instead be taking dinner at home before heading out.
In addition, I have convinced my friends to downscale from our choice drink to one where we will be spending Ksh1,000 a night.
To compensate for the two weekends spent socialising in clubs, I have joined a local book club and bought a book for Ksh1,500.
Of the two free weekends, I intend to spend one Friday evening reading and another Friday attending the book club. If successful, my new budget will be Ksh8,000 as stipulated below:
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Personal and household shopping takes Ksh32,000 of my monthly shopping. Some of the expenditure is for basics which I have no intention of reducing. However, I intend to entirely cut off some spending while getting bargain options for some of the basic items.
The current budget is as follows:
Starting this November, I have made a number of changes in my shopping pattern, which I hope will cut down my household’s shopping budget from Ksh32,000 to below Ksh20,000. The starting point is to limit take-outs to one mega pizza a month!
For beef and goat meat, I have been buying them at Ksh560 and Ksh600 per kilo, respectively, at the neighbouring butchery. However, I have been introduced to Dagoretti Market in Ndunyu, where I bought beef at Ksh300 a kilo and Ksh450 for goat meat. You have to get there early, especially on weekends, since the prices go up after the main distributors have exhausted their stock.
For 4 kilos of beef meat that we consume, the budget has moved down from Ksh2,240 to 1200. The expenditure for 2kgs of goat meat has been reduced from Ksh1,200 to Ksh900.
For groceries, I have also moved from the local vibandas to bi-monthly shopping at the local open-air market. The monthly groceries expenditure has since dropped from Ksh3,000 to Ksh1,500. The decision to buy in bulk has also negated the Ksh1,000 spent on sending our boda delivery guy on small shopping errands.
Moving forward, my spouse and I have decided not to have monthly shopping for clothes for ourselves. We will instead spend Ksh2,000 every month on clothing for our baby, who is in dire need of extra clothes (they are always growing!).
We will instead budget for a Ksh1,500 monthly saving for clothes and focus on a semi-annual wardrobe upgrade every year. This will also allow us the benefits of buying clothes in bulk as we can plan a dedicated shopping visit to Gikomba and Eastleigh instead of buying them at the local boutique.
Another life hack I have realised is that sometimes shopping at wholesaler shops is sometimes much cheaper than doing so at a retail shop or local supermarket.
On the baby items - milk formula and diapers - we buy them at the local supermarket at Ksh1,300 and 1,400, respectively. However, we visited a baby items wholesale shop on Biashara Street and were pleasantly surprised to buy the same brands at Ksh900 for milk formula and Ksh950 for diapers.
The total cost dropped to Ksh5,500. We also visited downtown Nairobi and did our monthly shopping for household items at Ksh4,000, while we normally spend about Ksh5,500 on the same.
My interim Shopping Expenditure for November has therefore changed as follows:
I spend about Ksh12,000 on transport costs including fare to work, fuel whenever I take my car to work or for therapy drives, and taxis whenever I have urgent errands. I plan to reduce this expenditure to about Ksh6,000 a month.
The low-hanging fruit is to work more from home. I am required to be at work for a minimum of three days a week, but I mostly work from the office for all five days. I spend Ksh2,500 on fuel when I drive to work for the entire working week (about Ksh500 per day). However, moving forward - inspired by the November Challenge, I will be working for only three days from the office - and working from home for two days.
Out of the three days, I will use public transport for one day and drive for two days. This means I will only need about Ksh5,000 to fuel my car for the entire month. I spend Ksh80 matatu fare to work, which means I will spend a total of Ksh160 per week and about Ksh640 per month.
I will cut the therapeutic drives to once a month, where I will spend Ksh1,000 to take the family on a weekend drive in the city’s environs. The projected transport expenses will come down to Ksh6,640 (Ksh5,360 saved).
The cost of living is now a global crisis - not even the developed countries have been spared. In Kenya, it has been compounded by the ravaging drought - forcing Kenyans to spend an extra shilling on almost every product and service.
As Christmas approaches, a sense of frugality is badly needed, given that household and personal expenditure often shoots through the roof during the festive season. The desire for financial freedom inspires November Challenge amid these biting economic realities. It is premised on the fact that saving does not always require a complete lifestyle overhaul. You can still enjoy the same quality of life - but cut down on unnecessary expenditures.
Read Also: 5 Ways to Budget For Christmas Now
My personal plan is projected to help me save Ksh25,700 per month without changing houses or doing away with basics such as health insurance and cutting down food portions. The November Challenge, which we hope to adapt as a way of life, just requires a personal reflection on the non-essential expenses that are taking away your money.
For example, a colleague who lives about 300 metres from the terminus has been spending Ksh50 every morning because he is often late. He spends another Ksh50 in the evening because he is usually hurrying to jog before dark.
As part of the November challenge, he is now waking up 15 minutes earlier to enable him to walk the short distance. He walks home in the evening and discounts the walk from the jogging distance. The maths suggests that if he is able to maintain this trend, he will be saving ksh2,000 every month. It is only 4 days into November, don’t be left behind!