Kenyan coins

This is one of those posts that I have mulled over  for a very long time especially  after reading  Suze Orman’s  book Women and Money: Owning the Power to Control Your Destiny.   After transitioning graduate school and living on coffee, noodles and  dreams,  I have come to appreciate the advice offered in her book and watching this  video. Though, it primarily targets North American readers, Women and Money discusses the relationship between  women (in their various roles) and money,  here  are few  lessons  that we can all apply in  our circumstances:

Having a Regular Date with Your Budget

As torturous as this  might sound, it is important  to know the  state of your money affairs  so  that you can be able to  create more money and comfortably spend it. Do not wait for  the  time that you will have  personal account or for your significant other to take care of  all the money issues.

You can take easy steps such as opening AND read your bank statements for both your credit and debit cards. These days your statements can be sent directly to your email so that you can confirm your payments and deposits against those ATM and store receipts ( if you prefer swiping your card or Mpesa-ing rather than carrying your cash).  This will help you notice any irregularities in your accounts.

Set aside time in your busy schedule to go through the important financial documents so that  you can see  where you can afford to save (and splurge ) in the next  month,

Read Your Payslip so That You Can Pay Yourself.

Most people, everyone looks at their net pay before any other item on their payslip. After accepting your monthly or weekly wage,  study your deductions and note whether they are worthwhile, well apart from the statutory ones.  This will help in the next tip.

Know How to File Your Taxes

This is one of the most important and excruciating things that everyone has to do in their adult life.  We must give to Caesar what is his so that he can ideally improve our infrastructure and bring about positive change in the nation. I  know. I know.  You are probably scoffing at me right now after reading the last sentence. At least do it so that you don’t  kill your political ambitions and/or land yourself in jail for tax evasion.

Apart from the online tutorials, Kenya Revenue Authority (KRA) normally runs free tax clinics in various counties which they advertise in the local dailies. Take advantage of this  and you could be the one helping your friends and colleagues come the next financial year.

Know the Difference Between a Savings Account and a Current Account

As basic as this may sound it is quite important to differentiate the two.  A savings account is meant serve as an emergency cash fund. However, it is less convent  than a checking account as it has restrictions on the minimal withdrawal amount and withdrawal frequency.  Most financial experts advise that you should save enough to cater for three to six months of your  living expenses. However, with the current state of the global economy, it would be better to save enough to one year’s living expenses.

To facilitate this, you can make standing orders to your savings account and for other important  bills, so that you don’t have to think twice about your  setting aside the cash. You can also consider having your saving  account in a different  bank   to lessen the ease of accessibility of the money.  If  you have a large sum of money that you might  have immediate use for instead  of putting it in a saving account, consider a fixed deposit account or a short term government security that will earn higher  interest .

Save For Retirement

Millennials have been pumped with messages of live in the present like there is no tomorrow.  We forget that one day we will grow old  and we will  need money as we retire to  that  farm  on the outskirts of  Nairobi  or  if you decide on the beaches of Watamu.  But  before then, we have to  work hard and save  up for it.  For those who are employed, the   most  obvious  way is  the  pension contribution scheme provided by  your employer.

Most employers tend to match their employees’ contribution, so please take advantage of that.  One of the greatest benefits of such schemes is that member contributions are tax-deductible.

For instance:  Kerry earns a  gross salary of KES 100,000 and contributes KES 10,000 to a registered scheme. Her PAYE income tax will be calculated on KES 90,000.  This means that she will pay fewer taxes and save more money for the future.

For the self-employed Kenyans, you can check out the Retirement Benefits Authority (RBA) website that  offers   you various tips on  individual  retirement benefits and also  a list of   providers

Debt Is Not Evil

Growing up, I watched too many TV shows that showed the adverse effects of having too much. My young mind registered: DEBT IS BAD!!!. When I finally started to educate myself about debt,  I learned that it is a necessary evil.

Let me explain.

There Is Good Debt and Bad Debt  

One should  take a loan i.e. good debt  that  will help them  generate income. For example, Higher Education Loans Board loans (HELB) are good  debt  because with a good education (all factors held constant *ahem*), you  will be able to earn a higher income and  be able to pay it off, once you start earning a steady income. Taking a loan to  build residential  houses  or  commercial spaces is also good debt as you will be able to repay it easily from the  rental  income. A home mortgage are also  another good example,  because shelter is one of your basic needs. Cars have become somewhat necessities in  our day and age  but we take  the loan, please rank  functionality slightly  higher than   prestige.

Bad debt is buying a luxurious good or going on holiday and charge it on your credit card on impulse. It keeps you up at night and makes you not want to open your credit card statement at the end of the month. It is now possible to compare loan products through the total cost of credit calculator website or app and make more informed decisions.

Get Your Estate in Order

A will dictates how  your assets will be distributed among your dependents.  Without a will, a court of law will appoint whomever it deems fit to do so.  One can also choose to move his or her assets into a  trust.  This can be your children’s education, maintenance for your dependants and any other specific  use that  you deem fit. The trust is managed an appointee known as a trustee.

Insurance is equally important  as we live in the age of terrorism,  rapidly shifting lifestyles and several forms of cancer and life have a habit of taking unexpected turns. We need to protect ourselves and our loved ones from these surprises. Currently, the Kenyan market has several service providers with a myriad of policies on offer. Ensure that you find a policy that meets your financial needs. Whether or not you are employed, ensure that you subscribe to a medical insurance plan that will help you go through any accidents or sudden illness.

Be cautious on who you choose to be your beneficiaries.

Dealing with the C-word

Not that C word.

I mean Commitments

It is said that  Africans are really big on their sense of family and relationships  and we would  go the whole  nine eleven yards for those who are closest to our hearts. However, it is important to note that mixing money and relationships is normally a tricky affair.  It is important to have a  written  agreement  for any financial transaction  that  you are involved, formal or informal. This is will iron any issues that will arise in future.    I love this  is anecdote from Kim:

Not all of my dad’s business ventures were successful. One my mom constantly reminded us of growing up was a data storage business that ended up shoved in a corner of our basement. Did you know that 1GB in the 80s takes up a hell of a lot of room?

My dad decided to offer remote storage well before the days of cloud computing with a friend. They were supposed to go in halves on 1GB of storage (remember, back then this was a huge amount of space and hefty investment). His partner never lived up to his side of the deal, they didn’t have any contractual agreements, and the business failed. We finally got rid of that giant hunk of junk a few years ago but it was a constant reminder in our basement that business ideas don’t always work out the way you think they do.

Lesson: Don’t run with every idea but be selective. Be selective about your partners too & get it all in writing.


In the case of  Harambees (fund raisers) for particular causes  offer to give in kind.  For instance, if your friend has an upcoming wedding, you can offer  to chauffeur the bridal party with your lovely car.  Maybe one of your colleagues is leaving your company, you can offer to organise (a.k.a running around) the going away party instead of giving a cash gift. Disclaimer: know how your gift will affect its recipient and make sure it will not be a burden or look like a  bribe.

Get a Side Hustle

In his  book, So Good They Can’t Ignore You, Cal Newport talks about  using career  capital to build financial viability in order to successful.  He  quotes Derek Sivers, ” Do  what people are willing to pay  for.” We have different skills that we can tap into in order to make the extra shilling. Computer whizzes can build  websites or fashionistas can offer fashion advice or  if  you bold  enough you pick up a job outside your field.

Agribusiness has gained popularity in Kenya over the last five years and people have realised that they can make money  out of their kitchen gardens.  Saturday  Nation runs  the weekend feature, Seeds of Gold that sheds light on agribusiness issues in Kenya as well as advertises opportunities to  farmers and investors alike.

Purge and Re-use

Now that its the beginning of the year, there is no better to time to clean out your closet.  With the advent of  OLX, there is no better way to make money out selling all those things that you thought you would need but have never gotten round to using.  If you are book-hoarder bibliophile like me, you can try to sell those books that have gathering dust on your bookshelf to hardworking Kenyans you sell second-hand books along the streets.

Embrace Minimalism

Over the last few months, I have been examining what influences my purchasing   decisions. Like many millennials, I have been caught in the “live-in-the-moment-do what-makes-me-happy” syndrome. I have learnt that you do not have to have a  KES 5,000 meal to have enjoyed the company of your good friends.  Moving and starting a  new life halfway across the world with a 40 kg luggage limit can force you to embrace a capsule wardrobe.  It has enabled me to be more intentional with my fashion choices as well as save a  couple of coins.

Investing in  experiences, not things will go a long way providing meaning and clarity to your life in 2015.

Related links:


Photo Credit via  Hapa Kenya

2 thoughts on “How to Make Your Personal Finances Work

  1. Thanks Kamongo for the reminder that I need to be astute regarding my finances. It’s an article well worth the read as we enter the new year. Happy new year!


  2. Thanks for including part of my article about learning from my dad’s experiences! It’s really important to get things in writing & be a good judge of character rather than getting carried away with it all. Great article!


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