What are the benefits of managing money?

• track spending to find out where your money is going

• avoid debt problems, prepare for emergencies, and save money for future goals

• sense of control over your finances can offer peace of mind

What types of strategies can help to manage money?

Complete a financial health check at least once a year:

A financial health check is designed to give you a clear snapshot of your financial situation and where your money is going. They are typically conducted as follows:

Calculate your total income:

To get a clear picture of your finances, you need to know all your sources of income:

• Wages

• Profits from businesses

Calculate your outgoing costs:

Keeping track of your outgoing expenses can be difficult. It can help to organize them into categories. One example of how to categorize is as follows, but do what makes sense for your lifestyle/spending:

• Everyday expenses: includes food, phone credit, tuk tuks, moto drivers and anything else unique to your situation. Try to calculate your day-to-day expenses and see what they cost you over a month or a year.

• Outgoing (monthly) expenses: includes rent, petrol, electricity, TV and phone. Your bank statements and regular bills will give you a good idea of how much you are spending.

• Loans & debts. As well as listing your monthly/weekly repayments, it is important to write down how much you still owe on your loan or loans and the time it will take to repay them in full.

• Savings. You may have regular savings in a deposit account. List the savings/deposits you make regularly.

• Occasional expenses such as medical costs, TV licence, birthdays and weddings.

If you have money left over after reviewing your financial situation, think about how you can use it effectively, and consider adding it to your savings.  If you are spending more than your income, think about how you can reduce your spending.

Identify goals and stick to a budget

From children’ education, to businesses to increased savings, each individual has certain goals that they wish to accomplish with their money. It can be far easier to reduce spending, and stick to a budget, if you clearly identify the goals you have for your money.

Using the same categories as your financial health check (above), outline a budget for the upcoming month or year that is a realistic picture of how much money you will make and how much you will spend. Be honest when thinking about your budget. Don’t overestimate or underestimate your sources of income or the cost of spending. If you have trouble sticking to your budget, thats fine. Start over, and make adjustments if necessary. The important thing is to be specific. Include your family in the budget and budget outlining process if necessary. Talk to them about how they can help save money too.

Shop around and save

Different MFI’s offer different interest rates depending on the customer. It is therefore critical to shop around to at least two or more MFI’s before taking out a loan. A lower interest rate can save you lots of money - money that can be directly added to your savings. These are the type of questions you will want to consider before making a commitment to a certain MFI:

• What is the interest rate?

• Is it compound or simple interest?

• Is interest calculated monthly, every 3 months or every year?

• Are there any administration or “loan processing” fees?

• Are there any late payment penalties or interest rate changes?

• Is there a fee for the MFI to get a credit report from the CBC?

• Are there are non-financial products, such as training workshops, awards, educational scholarship, or development programs available at the MFI?