I am 24, earn Sh105,000 but survive on mobile loans because of YOLO lifestyle
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially.
If you have any money problems, send us an email at simburu@ke.nationmedia.com and leave your number for contact. Money questions will be answered in this column.
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially.
If you have any money problems, send us an email at simburu@ke.nationmedia.com and leave your number for contact. Money questions will be answered in this column.
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially.
If you have any money problems, send us an email at simburu@ke.nationmedia.com and leave your number for contact. Money questions will be answered in this column.
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially.
If you have any money problems, send us an email at simburu@ke.nationmedia.com and leave your number for contact. Money questions will be answered in this column.
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially.
If you have any money problems, send us an email at simburu@ke.nationmedia.com and leave your number for contact. Money questions will be answered in this column.
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially.
If you have any money problems, send us an email at simburu@ke.nationmedia.com and leave your number for contact. Money questions will be answered in this column.
My name is Leonard, and I’m 24. I have various online freelance hustles that give me an average of Sh105,000 monthly after tax. However, I am always broke before my next pay cheque. I have been living quite a fancy YOLO lifestyle and I don’t know if this is a problem. My budget is as follows:
- Rent: Sh40,000
- Parents and relatives: Sh15,000
- Water: Sh1,000
- Electricity: Sh1,000
- DStv and Internet: Sh8,000
- Betting: Sh10,000
- Food: Sh10,000 Monthly
- Lifestyle (girlfriends and clubbing): Sh20,000
Loans:
- Mobile loans: Sh30,000 (In most cases I pay and borrow again. The more my limit increases the more I borrow).
- Friends: I owe different friends a total of Sh78,000.
Savings:
- I don’t save. I keep saying I will start but I never do so. To be honest, it never bothers me much since I am young and have time.
Lately, some of my friends have been buying plots, which I can’t afford to buy, despite my fancy lifestyle, and the good money I make. I also can't seem to get out of my debt and spending cycle. Please help.
Benjamin Cheruiyot – the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm
At 24, you should direct a minimum of 20 per cent of your earnings towards investments that will compound to higher amounts by the time you reach 35. Time is a great factor in investments.
You have an advantage on your side that should any investment go wrong, you can go back to the drawing board and still get ahead by age 35. You need to free Sh 21,000 which is 20 percent of your take home. You need to cut down or eliminate certain expenses. For instance, rent should not exceed 20 to 25 percent of net earnings. In your case, Sh22,000 is the base limit.
Your betting habit is regressive. The chances that you are not getting any net benefits from it is high, otherwise, you would have included earnings from it.
Re-consider too girlfriends and clubbing expenses as the Sh20,000 can fully service a loan taken towards buying a plot, or invested in a pension plan to safeguard your retirement. Your expenses amount to Sh115,000 against Sh105,000 earnings. This means you top up the deficit with debt, thus the high appetite for short term loans. Without any savings and investments, you have flouted the first rule of money: never lose money; and the second rule: your money should work for you. In your case, you are losing out on the compounding efforts of money. A good budget should be structured as follows:
50 percent towards Needs:
Rent – Sh22,000, Food – Sh8000, Water & electricity – Sh2,000, Internet – Sh3,000, Shopping – Sh3,000, Clothing & miscellaneous – Sh4,500, Parents – Sh10,000.
30 percent towards Wants:
DSTV – Sh3,000
Entertainment – Sh8,000
Debt management – Sh20,000
20 percent towards savings/investments
SACCO – Sh8,000
Money market fund – Sh8,000
Ordinary bank account – Sh5,000
Accumulated funds in the SACCO can get you a loan amount at 3X your savings. The MMF savings can help you finance medium-term goals such as the acquisition of a plot. Setting aside Sh20,000 monthly towards debt settlements will help you clear these mobile and "friendly" loans in six months. Once this is done, you should use the same to boost your bank savings. Upon hitting Sh100,000 you can invest in an infrastructure bond that pays about 13.98 percent interest per annum currently. You will earn nearly Sh7,000 every six months up for the duration of the bond.
There is no growth without patience. Consistency is the name of the game.
*******
Alex Kibebe, the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Too much clubbing and gambling will drain away your money very fast and leave you in constant debt and financial distress. You need to reduce. You can enrol for a course or join a charity or life improvement club such as Rotaract or Toastmasters. You will also need to resolve your debts as living in debt will hinder you from progressing financially. In order to do this, list down all the debts you owe and come up with a practical plan for settling them.
Since you do not owe much, you can settle all your debts in two to three months. However, you may need to reduce your financial support to parents and relatives and avoid clubbing and gambling altogether to settle the debts. If you find that you are still struggling to cut off from the habit of debt, you may consider getting help from a debt counsellor.
A simple guide to successful budgeting is by having your rent at about 25 percent of your income, other basic expenses at 25 percent, your luxuries and charity at 20 percent and since you are still single, I encourage you to save 30 percent of your income. In this case, your rent should not exceed Sh30,000. You can keep your food budget at Sh10,000, internet and DSTV expense at Sh8,000, water and electricity at Sh2,000 and your family and relatives support at Sh15,000. Consider reducing your budget for recreational activities to Sh10,000.
I recommend investing your savings in either a Money Market Mutual Fund (MMF) or Sacco account. If you want to avoid debt in your investment journey, then MMF is ideal. One of the ways you can stay focused on your savings journey is by having specific investment goals. This may include buying the plot, building a house, raising capital for a business or any other investment goal that might be of priority. Having such a goal will keep you motivated to save and even encourage you to seek more hustles.
The other way of ensuring that you remain disciplined in saving is by placing a bank order to automate the transfer of your savings to your Sacco or MMF account every month. This way, every designated allocation will be dispersed before any spending.
At your young age, you have the golden opportunity to squeeze yourself thin, maximize investments and guarantee yourself a very financially stable 30s and 40s. Your earnings are on average over three times higher than many of your age, which means you have the capacity for higher investment power. As you ease off your debts, you should consider a retirement package. Being in your 20s is never too early to start planning for your 30s, 40s and 50s financially. BY DAILY NATION
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