​​​​​​​How can I reduce my entertainment bill?

personal finance

​​​​​​​How can I reduce my entertainment bill?


Cash

A person holding banknotes.FILE PHOTO | NMG

Is there a percentage I should cap on entertainment spending?

Most experts advise that you should spend between 5 and 10 percent of your net income on entertainment. However, how much you should spend in most cases depends on your disposable income.

This is what you are left with after all your important needs are taken care of. It’s difficult to get rid of entertainment completely since it makes life worth living, but how can we have it without breaking the bank?

Start with the needs

In order to spend money wisely, one must identify the “must-haves” and the “extras” and allocate money wisely to each.

The “must-have” includes things you need to survive, like bills and groceries, “extras” refers to entertainment or things you can do without, but which enrich life by making it either fun or convenient .

Create a financial budget

Budgeting is the best way to determine how much you can afford to spend on the “extras.” A budget is not created overnight; It requires you to track your expenses over a while and identify and list the recurring expenses.

After identifying these expenses, set aside the money spent on them. For example, if your salary after taxes and other deductions is 50,000 Sh, and your list of recurring expenses is as follows:

Rent: Ksh 15,000

Food: Ksh 5,000

Electricity: Ksh 1,500

Water: Ksh 1,000

Charges: Ksh 2,500

The total amount spent on the “must-haves” is 25,000 Sh. The second step is to set aside money for saving and paying fees. Let’s say your savings are Sh10,000 and you owe Sh5,000. You have Sh10,000 left. All essential needs, savings and other obligations checked, now we can talk about entertainment with the remaining money.

plan entertainment

Sound financial management dictates that you spend as little as possible on entertainment and use the rest of the money on other personal growth projects. Here are some of the things you can do to maximize your entertainment experience while still spending less:

Find what you love and spend on it because entertainment can be spontaneous and hard to control. If you love outdoor activities like game drives for entertainment, hanging out with friends, or taking your family over the weekend, try to limit yourself to spending money on them.

This avoids unnecessary impulse spending or peer influence.

Rate your entertainment options

We all have different ideas of what entertainment is. Start by listing what you consider “entertainment” and how much you spend on it. Your goal should be to minimize the amount spent on similar entertainment options.

For example, if you have access to streaming platforms like Netflix and Showmax, while you also love going to the cinema to watch movies, you can choose the one you spend more time on and make it your primary movie-watching option .

Have this as part of your entertainment budget and scrap the rest. This helps you spend only what you use, leaving more money for other options.

After this exercise, divide the sum of the monthly funds allocated for entertainment by four to know how much you can spend per week. This will let you know if you’re within the parameters of what you can spend weekly, or if you’re overspending.

Always go for bargains

Remember, you’re trying to reduce the amount of money spent on entertainment, and deals are a perfect way to do that. If you love eating out, customize your day with deal days for the place you want to visit.

For example, you can consciously go on a pizza date on Tuesday when you’re sure you’ll get what you want at a fraction of the regular price.

Always keep an eye out for new places offering your desired services as they always have discounts.

Is it worth?

As much as you love clubbing, dining out, game drives and charity events, money is more valuable when it’s spent on something that enriches your life.

Just as success in life is measured by purpose, the value of money is measured by what it is spent on.

So, when creating your entertainment plan, keep in mind the expected outcome of the time spent. Is it quality family time, networking opportunities, or recharging after a busy week at work? This gives you good value for money.

Increase your income

An additional source of income can help you sustain your entertainment needs without worrying about money. Consider passive income that can help you meet your entertainment needs and still meet your basic needs.

Gloria Adhiambo is a financial trainer and consultant for retirement solutions at Zamara. She can be reached via [email protected]

source

Leave a Reply

Your email address will not be published. Required fields are marked *