Many people in their 20’s and 30’s would like to save for retirement, but do not know how or where to start. In these hard economic times, if finding a job is not your problem, student loan debt, credit cards and other millennial expenses are weighing you down. There seems to be hardly anything left to put aside for a rainy day.

It is impossible to save at this stage of life right?

Not quite. There are some tips and tricks which when applied to your financial planning can leave a buck or two for your retirement kitty. It is just about knowing how and where to start and sticking to it. The Swahili saying ‘Kidogo kidogo hujaza kibaba ‘ (little by little fills up the sack) is actually good money mantra to motivate you into saving every month.

Here’s where to start;

Look out for insurance schemes

Bank accounts and savings and credit cooperative societies (SACCOS) are good short term saving options but for retirement, you need a solid, safe account. There are many more saving options you can make good use of in your younger years. It’s all about developing a saving culture.

Look out for, and talk to these insurance companies operating under Association of Kenyan Insurers. Get the info and get saving:

Avoid debts

This is the right time to start developing good money habits that will positively impact your later years. In your 20’s and 30’s, your finances are less complicated than they will be in your 40’s and 50’s. Do not accumulate loans that will have you paying for the rest of your life.

I know it is tempting to go with the hype and get high mortgages, car loans and other luxury loans banks offer nowadays, but it will greatly impact your financial future. Why live large on loans now, pay them for the rest of your life and retire a pauper in your golden years?

If you have to take a loan, take one that you can pay off in less than 5 years. Also avoid accumulating credit card debt. Instead clear what you have. This way you will not always be in debt, leaving something for your savings account.

Save 10% every month

It is easy to get the impression that savvy investing is the way to go, given the attention market and investments opportunities are getting from the press. But suggests saving is far much better option if you are looking for guaranteed financial security. Instead of risking the little you have on some big investment which by the way depends on market performance, how about saving a little every month.

Apart from National Social Security funds deductions which are less than 10%, dedicate a percentage of your income to a retirement fund every month. Deposit as little as 10% of your monthly income so you do not affect your take away budget. Of course you can go for a higher percentage depending on your income and other circumstances.

Setting up automatic monthly deductions from your income account is a good way to ensure you deposit money monthly without being tempted to spend it.

Be frugal

And reasonably so. You do not have to go hungry or get your family malnourished in the name of saving. Neither does saving mean that you cannot once in a while enjoy your money on some well-deserved fun. But always be on the lookout for how you can save a few coins in between you expenses. If it cannot fit in your budget whatsoever, skip that road trip with your friends and go on another one next time. Find cheaper deals on your regular shopping. There’s always a way to save a buck!

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