Times are undeniably challenging, and trying to find balance when money is tight is stressful. Reducing debt and improving your credit score, even with limited funds, is possible with a few manageable steps. Here’s a realistic approach to help you start regaining control of your finances and work toward a more stable future for you and your children.

  1. Start with a Small, Realistic Budget

Take stock of your income and expenses: Write down all your monthly income and fixed expenses (rent, utilities, groceries, school costs) to get a clear picture. This may seem obvious, but knowing exactly where every shilling goes can help you find areas where even a few small changes can make a big difference.

Create a survival budget: Focus only on essential needs. Avoid unnecessary purchases where you can, and if possible, cut out small, non-essential expenses (like daily takeout) that add up over time. This will free up even a small amount, which can go toward paying down debt or small savings.

  1. Set a Small Emergency Fund, Even if it’s Just 50/= a Day

Starting a small emergency fund, even if it feels tiny, is powerful. Set a goal as low as 50 shillings a day, which adds up to 1,500/= a month. This way, you won’t feel the pinch as heavily, and it creates a safety net for emergencies, reducing the need for loans.

  1. Reduce Debt with the “Debt Snowball” Strategy

List out your debts: Write down all your debts, from smallest to largest. Seeing everything laid out can make it easier to tackle.

Pay off the smallest debt first: By focusing on paying off the smallest debt first while paying the minimum on others, you’ll gain momentum as you clear each one. The psychological boost of eliminating small debts can motivate you to keep going.

Avoid high-interest loans: Try to steer clear of short-term or high-interest loans whenever possible, as they can add more pressure and debt in the long term.

  1. Negotiate Lower Interest Rates or Debt Relief Options

Reach out to your lenders or creditors to discuss your situation. Many are open to offering relief options, such as temporarily lowering your interest rate, giving you a payment break, or restructuring the debt. It’s worth a try, and often, creditors appreciate open communication.

  1. Explore Ways to Increase Income

Side jobs: Consider small side jobs that can add a little extra income. This might include freelance work, selling gently used items, tutoring, or even offering services such as babysitting or errands for neighbors.

Leverage skills: If you have any particular skills or hobbies (like cooking, tutoring, or even crafting), consider if these can generate income on a flexible schedule.

  1. Consider Government or Community Assistance Programs

Community resources: Many local programs offer support for families, such as food banks, school grants, or government subsidy programs. Don’t hesitate to look into what’s available to ease some immediate financial pressures.

School assistance programs: Some schools have bursary programs or scholarships for families in need. Inquire with your children’s school about any programs they may offer to help reduce school-related costs.

  1. Automate Small Savings (if Possible)

If you can free up a small amount each month, set up an automatic transfer to savings, even if it’s only a few hundred shillings. Many banks or mobile money services allow small automatic transfers that can go into a separate account without requiring you to remember. Even 500/= a month can grow into a meaningful cushion over time.

  1. Revisit and Adjust Regularly

Assess your budget monthly: Track your progress regularly to see where you can make further adjustments or if there’s room to add a little more toward debt repayment or savings.

Celebrate small wins: Recognize each bit of debt you pay off and each amount saved, no matter how small. These wins add up over time and keep you motivated on your journey.

These steps won’t bring overnight relief, but starting small and building over time can help you slowly chip away at debt and gain more control over your finances. Remember, financial stability is a journey, and every small step forward counts.

Celestine Tamara Were

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