Ecclesiastes 10:10 says, “If the iron is blunt, and one does not sharpen the edge, he must use more strength, but wisdom helps one to succeed.” Learning more about financial management and taking the time to plan is our way of making sure that the axe is sharp for the job ahead.

One of the main tools where planning is concerned is a budget. It is amazing how many people go through life without budgeting their money. They have an idea of what they need to allocate to the fixed expenses in their life but the variables are up in the air. This needs to change if you are going to make progress.

Budgeting takes four main actions as follows:

1) Begin by determining where and how you are spending your money. This calls for expense tracking. I hope you have been tracking your expenses this month .

2) Evaluate what you have discovered about your spending in light of the goals that you have set for yourself. If you keep going like you are, will you get where you want to go?

3) Identify any behaviors that you have, or circumstances that you may be in, that lead you to spend money unnecessarily and eliminate them. If you are a spendthrift, what are your triggers?

4) Monitor your ongoing expenditures and make sure that they are in line with the financial goals that you have set for yourself.

Your strategy for financial freedom needs to take you in the direction of the goals you have set for yourself.

Budget Considerations

Each one of us has a unique financial situation. This simply means that we can’t have a cookie cutter budget that fits everybody. What I have here are items that you need to consider when budgeting. Put down the amount beside each item and the percentage of your income allocated to it.

E.g. Gross Income – Ksh. 50,000 – 100%

Gross Income
Statutory deductions + tax
Giving (Tithe/ offerings/ gifts/ funerals/ weddings)
Shelter (Rent/ Mortgage)
Chama – etc…
Debt Repayment
Insurance Policies
Utilities (Electricity + Water)
Household shopping
Recreational/ Social life

Having a miscellaneous amount allows some room for flexibility in case something comes up along the way, or you forgot to budget for something.

Look at the percentages you have allocated to each item. What do you need to change?