Today I am going to show you a trick I used to save Ksh1 million from my Ksh70, 000 salary. It actually took me 2 and half years to achieve my goal.
Saving depends of many factors, which include, location, spending habits, marital status, salary, health status and lifestyle. For you to save, you have to cut down on the following:
- Alcohol
- Spending on women
- Lavish lifestyle
- Too much charity work
- Unnecessary travelling trips
Assuming your monthly salary is Ksh 100, 000, this is how to save Ksh1 million.
Gross salary of Ksh100,000 attracts NHIF,Tax and NSSF.After deducting the three, your account will be credited with Ksh KSh 74,887.75.
I take a classic example of an individual living in Nairobi. With Ksh 75,000 in your account every month, here is how to spend it.
Transport should consume Ksh 10,000
Rent should take Ksh 15,000
Other expenses should take Ksh15,000
The total of this is Ksh 35,000.Assuming you have a vehicle, your car would increase transport cost to Ksh20,000.
A normal person earning Ksh 100,000 should have a net figure of Ksh40, 000 in his account each month. This is the money to be invested.
We have various ways of investing the money. I normally advise my readers that given fixed deposit account and money market, they should go for Money Market. The returns from money market are extremely good and tempting. If you invest the Ksh40, 000 in money Markey, you will earn over Ksh500 each month. If you invest the same amount in fixed deposit account, the most you will earn is Ksh300 each month.
In2 years, you will be able to save Ksh1 million from your Ksh100, 000 monthly salary.
This is just one example. But below is a table showing the amount you should save each month to reach a million
| Salary(Ksh) | Expenses(Ksh) | Savings(Ksh) | Saving Duration(Years) |
| 100,000 | 35,000 | 40,000 | 2 |
| 90,000 | 30,000 | 37,000 | 3 |
| 80,000 | 30,000 | 31,000 | 3 |
| 70,000 | 27,000 | 27,000 | 4 |
| 60,000 | 25,000 | 22,000 | 5 |
| 50,000 | 22,000 | 18,000 | 5 |
| 40,000 | 15,000 | 18,000 | 5 |
Ideally, this is how to save money when you reduce unnecessary expenses.
