How to save a little money when costs keep rising

By On November 9, 2009 · In Life in Ethiopia

Shocked Birr

The problem

Ethiopia is getting more expensive to live in. The cost of fuel went up again and taxi fares with it. A minibus ride in Addis that used to cost 1.60 Birr now costs 2.40. This may not seem like much but it will increase your monthly transportation costs by at least 50 Birr. If you happen to commute longer distances, it could go up by almost a 100 Birr. In a country where some people earn less than 300 Birr a month, this is a major issue.

To make the issue worse, salaries don’t increase because companies are either unable to do so or want to make every possible cent of profit in a bad situation. But an increase in salary may not be the solution because salaries are notoriously low to start with. An increase, unless it’s huge, won’t really meet the need.

Luckily for me, my salary is not as low as some of my colleagues and friends. It is definitely higher than the national average. Even so, the rising costs have affected me. Others are feeling it much more. What do you do in a situation like this?

Here’s some help

Below I’ve listed a few methods that help me get through the month on my salary. I’ve also added some things my colleagues have done that are great ways to save money.

  • Keeping trackSee what you spend your money on. Try this little exercise. Keep a note of how much you spend every day and what you spend it on. When you’ve done this for a month add everything up and see what your major expenses are. When I first did this I was surprised to see that my biggest expense was food and drink bought at cafes and restaurants. It didn’t seem like much, a couple of machiattos a day at the cafe downstairs, a coke and a burger every other day – but it added up to almost half my salary during the month. Rather surprised by what I learned from my little exercise, I decided to set limits on how much I’d spend on different things. If you’re looking for a program to help you keep track of your money try Gnucash. It’s an open source program that does everything financial. I just use it to keep track of my money, but there are more features I still haven’t gotten around to learning.
  • Budget well. Once you know where your money goes, you can figure out what to cut down on and what you can do without. Set limits on how much you’ll spend a month on groceries, entertainment, dining out, fuel, transportation and utilities. Budgeting doesn’t make you a prisoner, it helps you spend and not panic at the end of the month.
    • Envelopes: I learnt this method from my sister and her husband. My wife and I try our best to follow it. This is how it goes. Get a bunch of envelopes and mark each one with a different part of your budget – rent, groceries, entertainment and so forth and so on. Then just put the money you’ve budgeted into its own envelope. If you run out of money in your Dining out envelope, then you just go through the rest of the month with no more dining out. Don’t take money from another envelope. If you have any change after you buy groceries, put the change back in the Grocery envelope.
  • Walk. I started walking to work to exercise. But then I started realising that it did cut down a lot of my taxi costs. It only takes me 45 minutes to walk to work. Taking the minibus takes about 30 minutes. I only have to leave home 15 minutes earlier and it helps me think and get ready for the day ahead. Plus it has the added advantage of getting you back into shape.
  • Moving HouseMove. My friend did this recently. He found an affordable place closer to where he works and he moved. Now he doesn’t spend any money getting to work. He just gets up and walks down to the office. This may only work if you’re single, but it’s a nice idea.
  • Don’t use too many contract taxis. I used to use contract taxis every time I needed to get somewhere fast and I was running late. Now I have access to a motorbike so I don’t really need contract taxis. Before I got the bike, I managed to save a lot of money by leaving home earlier and either taking a minibus or walking to where I was supposed to go.
  • Shop in Markato. Set apart a day every week or month to go and shop in Markato. Most goods are available at wholesale rates in Markato. Some supermarkets also have lower rates than others and most offer discounts every now and then.
  • Pack your lunch. This follows from what I learnt about how much money I spent eating out. I started packing my lunch at home and saving a lot of money.
  • Prepaid scratch cardsGo prepaid. Sometimes the bills you get are much higher than what you expected. I’ve found that a great way to stay within budget is to go prepaid. You can do it with mobile phones, your internet connection (with CDMA 1x SIM cards available from Ethiopian Telecommunications) and even with electricity (the new condominiums come with prepaid electricity metres).

I hope you found the list useful. If you have some tips of your own or know of any great discounts/offers happening in Addis or other towns in Ethiopia, make sure you leave it in a comment below.

Update:

  • Some feedback from Abule:

    • …you forget one thing which makes your money cruise out of your pocket in a high way. That is night life.
    Price of everything quadruples after 4 o’clock (10PM).

    I’m not really a going out person so I’ll trust Abule on this. Not sure what solution to offer though.

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About The Author

David Kirba

David grew up in Ethiopia. After a nine-year stint in India he came back to find the country the same... yet different. Through this blog he hopes to create a place where people can learn more about life in Ethiopia - how different it can be from what is often perceived. He also blogs about anything that interests him at The Misadventures of David K and about digital photography with Ubuntu Linux at Ubuntu Photographer. When he isn't blogging, David is enjoying life with his wonderful family.

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