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Category: Personal Finance

4 Tips To Sail You Through a Financially Sound Christmas

So we have finally come to the end of the year. Like many years before we have made mistakes, we have failed and we have also had some victories. Some of us are taking wealth building seriously and some of us are not there yet. If you have no idea how to start creating wealth, read this article, it should be of some help.

As with everything else, our finances may have improved or gotten worse over the past year. 2017 was also an election year and that did not make it easier to improve finances. Businesses were down, firms began downsizing and people lost jobs.

However, there are some of you who have not had a bad year financially but your finances are anything but orderly. There is always the will to do better, to save more, to stop impulse spending to stop lending to people who do not pay but somehow we are unable to beat the temptations.

If you are in debt and would like to get out of it, read this post it will help. Also if you would like to know about the don’ts of a small business, hopefully this article will help you along.

Since we are in December and it is the season for giving and therefore I will not tell you about how to start saving. Look out for my eye opening post next month.

For now, let me give you a few pointers of how to navigate the beast that is Christmas and still stay above water in January.

  1. Deal with absolutes for January before spending for the holiday

You are probably going to be paid this week. For some, this is a natural occurrence but for some it is a delight restricted for December.

There is always an excitement that comes with receiving your salary. If you have already been paid, I may be too late, but in case you still have some money in your account I may be just in time.

We are all familiar with the 70 days of January right? Well to save yourself from that, the first items on your budget should be those must do items for January for instance rent, water, electricity bills and transport and of course savings.

It is very easy to be consumed by the ghosts of Christmas and the myth that you have to spend all you have. That you have to attend every party and pay for every excursion offered to you, the truth is, you should let your pocket decide that.

  1. Create your holiday plans around your budget

It is very tempting to want to invite all Christmas events or turn up for a full ten days because your friends are doing it. I understand that, but if you are to grow financially you will only attend to things that can fit in your budget after being done with point one above.

Remember positive growth in anything requires a lot of discipline and you have to catch yourself when you are about to do something financially self deprecating.

If you cannot afford to go upcountry do not, if you cannot afford that concert next week, stream it or put on your head phones and blast them.

If you are an influential member of your gang and you do not want to miss out maybe you can

  1. Opt for less money intensive entertainment options

Let us face it, it does not matter how much I preach. This is probably the first time you are actually resting or catching up with your friends for real. Yes, you want to be financially healthy but you also want to unwind.

The good news is, you can do both but your options may not be what you are used to. You may have to tone it down a notch or two. Take for example that you and your friends love road trips and love to use car hire services.

We all know what happens when demand is higher than supply right? If you don’t, the prices go up. Hiring a vehicle will cost a pretty penny this season. It would be more prudent for you to choose a closer location and pay an Uber instead. The fare will be cheaper and you will not need to buy fuel too.

You can also alternate going out, and having brunch where everybody brings a dish instead of eating out all the time. Also check out this post about entertainment costs.

  1. Keep yourself busy with things that do not involve walking around and shopping

It is finally the end of the year. You have been working for ages and you are finally free. Having a bit of time just for you should be a good thing but not in this case.

You have become accustomed to being on your feet all day, beating deadline and all that jazz. Now all of a sudden you have all the time in the world no idea what to do with it. I would suggest time consuming activities because when you are idle you tend to think you are very rich.

You end up in town and all of a sudden everything is pretty. You see that vase you have been looking for all year and the salary has just come in. You already have 15 vases in storage because there is just no space for them but, let us not let that stop you, but I digress.

Try to take up something that will use up your time and leave you so tired you have no time for impulse shopping. Check this list out, it has a lot of good places to visit for, wait for it……… less than Ksh.1000.

Final thoughts

This is a season of merry and giving. My only advice to you would be, please do not forget yourself. Do not give what you do not have, do not spend what you cannot afford to.

It can be very difficult not to conform, it is easy to keep up appearances rather than live within your means. The one thing you need to remember is that growth is hard but worth it in the end.

Giving up stuff may not be the easiest thing. However, one day your holiday fund will be complete and you will look back at this moment and be glad you decided to be so mature.

Being financially responsible however, does not mean you should not spend time and money on what is important. Hang out with the people you love do not be a yes person when it comes to your wallet.

As always, I am grateful that you have read this post. Feel free to comment with any questions or any additions to this post.

Have a merry Christmas and a joyous new year.



8 Mistakes You Could Be Making as a New Small Business Owner

Over the years as an Accountant, I have come into contact with stories of small businesses barely surviving due to financial trouble either directly or through stories that other people told. I have also encountered very successful businesses.

Times are hard and business is also difficult and not everyone’s cup of tea but while some businesses suffer due to hard economic times, some just overlook a few things that may land them in serious trouble. It would be my joy not to have you make these same mistakes after today.

  1. Failing to Conduct Proper Research of the Industry

I am sure you have at some point encountered somebody who said, “I would like to take a loan and do something as a side hustle.” Or perhaps someone has come to you and said, “This job is not that good, it does not have security maybe we should put some money together and do something.” Do not get me wrong, these are not bad statements; in fact, I am sure plenty of big successful businesses started with these kinds of statements.

The problem is that a majority of people say this and think nothing of it and then maybe people started getting laid off at their workplace or they just feel threatened. They go into panic mode somehow they hear someone say they started an M-Pesa shop or a Wines and Spirits and that it does very well.

What do they do?

They take a loan or use their savings and put one up just because apparently, it worked for somebody else with no background research.

What are the chances that the business will do well? Very close to zero. When choosing to start a business, one should find out about the industry

  • What are the requirements for entry in terms of licenses or registrations?
  • Are there any location restrictions legally or otherwise?
  • Are there barriers to entry of any kind?
  • What is the average incubation period for startups in the industry?

Are just but a few questions one should ask before venturing into a business

market analysis

2. Giving No Thought To Market Analysis

From the previous example, the owner of the new business did not have any background on what they were starting. There could be instances where people actually do have some background in the industry they plan to get into but may not necessarily know the market.

The market is dependent on several factors the most important being the location. It would be ludicrous to a point for one to, for example, start a bar in a Mormon neighborhood. The business may not take off let alone survive whereas it may have done better in a college neighborhood where different backgrounds come together and mischief and adventure are an everyday thing. First of all, find out;

  • Do you have a market? If a product or service is new one will need to first create a market and will need to know where to find it.
  • You now have a market, what are the demographics of the market. If your market is, for example, predominantly young you will need to find a way to connect with young people otherwise nothing


3. Giving Marketing a Back Seat

So now you know your market, you need to reach out to it. There are people me included who swear that marketing is not their thing maybe because of their personality or because they just do not like it. If you are doing business and you are in this category I have some very bad news for you, you will fail.

When I talk about starting a small business, I mean you may not have the funds to have a bad ass marketing team, you may not even afford to have one marketer in the beginning and so you will have to be the business brand ambassador. Nobody will buy your goods and services if they do not know you exist, you will just have to suck it up and put yourself out there if you have any intention of succeeding.

You will have to source for clients, talk your throat dry about your business and of course offer stellar service. The best marketing is the word of mouth of a satisfied customer. In today’s world we are lucky because you get to also advertise on the internet that is cheaper than conventional methods so take advantage of it.

It may be overwhelming at first so start small. Tell all your friends and family members what you do, you can even create business cards for them. When you tell someone for the first time

4. Asking for help from the wrong people

Too often new business people may not go to experts per se but will just talk to their friends who have no expertise in the areas they choose to go into business in. The business may fail to take off correctly not because it is a bad idea but because it was set up as a result of a collection of hearsay.

Instead of just talking to your friends ask them if they know someone who knows about the business who you could talk to. You could also find a business consultant in your area of business. There is also the option of making google your trusted companion in your journey. You can also talk to your bank manager about it, they tend to have a lot of information about businesses because they fund them on a daily basis.


5. Having too much faith in the business financially at the onset

Okay so nobody starts a business to see it fail, true, but just like a child cannot walk on day one, a young business also needs to be nurtured to maturity before it can earn enough to sustain itself. This being the case, you need to have a nest egg to carry the business forward for sometime before you begin to earn substantial returns.

Believing that a business will turn profitable immediately is a myth except of course if you peddle drugs in a corner for which you pay no rent, licenses, utilities and all the good stuff business owners have to pay for. Even if you are working from home, you should be able to pay your bills right?

6. Spending cash on capital items too early

While you have to purchase capital items like machinery, you should not be totally dependent on the young business to purchase these things. They should either be factored in when deciding on the amount you need to start the business or they should be purchased on credit.

Credit payments are spread over a period of time. Without the spread, the business may find itself in a situation where it will struggle to meet its operating expenses. You may have to come up with strategies that will help you better manage your cash flow problems.


7. The Kiosk mentality

When doing the introduction to business, there is a topic on sole proprietorship where there is really no legal difference between the business owner and the business itself, they are one and the same.

To become a successful business person you will have to totally forget that definition. Legally it may be viable but for your success, you will have to separate yourself from the business.

You will have to maintain the business books and only take from the profit. You will have to know how your business is doing by ensuring that its money is not yours and you will have to make an effort in order to earn from it.

Investing in basic book-keeping services will ensure you make astute financial decisions from the onset. You may not afford a book-keeper but you can enroll for a finance for non-financial mangers class.


8. Lack of Patience

Business, as mentioned earlier, is not easy and it may not be rosy for a long long time but you have all heard the saying, nothing good comes easy. If you lack patience, then business is not for you because you will quit even before you begin.

There will be good days and bad days and flat out nasty ones my advice? Stick it out, surround yourself with positive people, do your best and involve God. There will be some, No a lot of blood, sweat, and tears but eventually, there will be the success.

Starting and running a business is not child’s play. it requires a lot of hard work determination and strategy. There will need to be a lot of diligence on the part of the small business owner for their business to flourish begin to give you that income that every one desires. Hopefully, these eight tips will give you an idea on how to go about it.

Feel free to comment and add your own tips in the comment section. Wishing you all a fruitful endeavor. Cheers.

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