Being on the financial ‘knife-edge’ implies one has only enough savings to live on for one month. This is a deadly situation because if anything unplanned for happens, you could be forced over the edge into living on perennial debts.
No one enjoys living on a financial brink. Unfortunately about 40 per cent of the working class is in that uncomfortable position.
Among the Rwandan youth that is between the ages of 23 to 35, it rises to an even higher proportion, with 53 per cent on the edge.
Research suggests that, at an economically uncertain time when we need to save more, a quarter of us have actually reduced the amount we save compared to six months ago or even stopped saving.
The prospect of rising costs and job losses hanging over the population might lead you into a grave situation.
There is need to create a financial cushion. However, there is need to first sort out your debt before you create a financial cushion to lean back on.
Or, if you don’t have a serious debt problem, get spending under control by setting yourself a budget for each month and keep to it.
Switching to a zero percent credit card might also do the trick. When trying to find more money to save this is the important bit.
Make sure you switch your unsecured debt to the cheapest you can get. You may also save by switching utility providers, checking out cheaper insurance and using less money than before while shopping.
One should also try to increase his or her income. To get more cash you could try and get a promotion at work, change to a higher paid job or get an additional part-time job.
Or if you’ve got a spare room, rent it out and earn more. However, whatever your income you should live within its limits and put your finances under control.
You should set yourself a savings target, say three months salary in your savings pot within a year and make sure you are getting the best interest rate.
Most individuals are not fond of making budgets either because of laziness or find making budgets dull and boring.
However, this culture should be inherited in order for you to stop living on the financial knife-edge. Budgets show exactly how much you spend each week. Afterwards, you can evaluate where to cut spending and where you can make your money earn more for you.
If you are a bachelor and you prepare yourself meals those shopping bills can be cut into half by rediscovering the joys of leftovers and freezing spare food can save you a huge amount.
Non-essential purchases can also eat up a big chunk of our incomes and savings.
Cut out some of these purchases by going for discounts in the many shopping malls and shops around Kigali, socializing less and ensuring your credit record is in the best shape.