This personal finance question on raise money to finish construction of a family house was answered by Alex Kibebe. Mr. Kibebe is the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach.
The Question: Our names are Philip and Jane. We are married with two children. We are employed in permanent and pensionable jobs and earn a combined amount of Sh126,000. We currently have one main debt of Sh330,000 which we took from a relative that we need to pay off by April 2026.
We have an unfinished four-bedroom family house located in Machakos County that we want to finish before the end of this year. The approximate cost of finishing is between Sh2.5 million and Sh3 million. We also have three acres in Nyandarua County that are currently idle. We would like to fence off this land, build a modern zero grazing infrastructure, and a live-in wooden house for a farmhand.
The goal is to start dairy, goat, and chicken farming, and also farm peas, cabbages and potatoes. We are thinking about applying and investing Sh2 million loan into this project. Currently, we do not have significant savings. We only have Sh120,000 emergency kitty saved in a bank account.
Our main expenses are as follows: school fees Sh150,000 annually, rent Sh24,000, shopping and groceries Sh25,000, househelp Sh12,000, our parents (both sides of family) Sh20,000, tithe Sh12,600, fuel Sh12,000, airtime Sh2,000, power, water & tv subscriptions Sh13,000. How do we achieve these goals?
The Answer: Your combined monthly income is Sh126,000 against monthly expenses of about Sh133,000, after factoring in a monthly provision of Sh12,500 for school fees. This means you are currently running a monthly deficit of roughly Sh7,000.
In addition, you have an outstanding loan of Sh330,000 that is due in April of this year. You are also looking to complete your home in Machakos and invest in agribusiness on your Nyandarua land.
To achieve these goals without exposing your family to excessive financial risk, you will need to adjust your timelines and deliberately reduce your expenses to eliminate the monthly deficit and generate a surplus of at least Sh15,000 per month, which will form the foundation for debt repayment and future investments.
Begin by reviewing your expenses based on priority. For instance, you could reduce your shopping and grocery budget to about Sh20,000 by sourcing from more affordable markets and cutting back on luxuries. Parental support could be temporarily reduced to Sh10,000 through open discussion.
Fuel costs could come down to around Sh8,000 by using public transport where practical, while water and television subscriptions could be reduced to about Sh10,000 by limiting entertainment expenses to internet services only. These adjustments could help you achieve the targeted Sh15,000 monthly surplus.
If you manage to consistently free up Sh15,000 per month, I would advise that you prioritise clearing the Sh330,000 loan. With only three months remaining, settling the full amount by April may not be feasible. A more realistic approach would be to renegotiate the repayment terms with your relative.
My Sh272,000 savings in MMF earned Sh1,100 net interest in 15 days
One option would be to pay Sh80,000 from your emergency fund immediately, and then commit to monthly repayments of Sh15,000 from now until April 2027, at which point the loan would be fully settled. Once out of debt, prioritise rebuilding your emergency fund using your savings over the next five months, to replenish it with at least Sh75,000.
Once your emergency fund is restored, your next priority should be that of completing your Machakos house to a liveable standard. Doing so would save you Sh24,000 monthly rent, significantly freeing your budget. However, borrowing Sh2.5–Sh3 million at this stage would place significant strain on your income.
I would encourage you to re-budget the project to focus strictly on making the house habitable rather than fully finished. Possibly, a budget of around Sh1.2 million may be sufficient to achieve this. If you were to take such a loan from a SACCO at an interest rate of about 12 percent per annum over five years, the monthly repayment would be approximately Sh26,700.
You could apply your Sh15,000 monthly savings toward this amount and temporarily fund the shortfall from your emergency fund and, or from halting the allocation of Sh12,600 to tithe. Note that while tithe is based on personal belief, it is not cast in stone, especially when it is to the detriment of your financial wellbeing and progress.
Once the house is complete, the rent savings would comfortably cover the loan repayment, with the surplus redirected into savings or a Money Market Fund (MMF) – to boost your funds.
The other alternative is to sit down with your fundi and identify the most critical parts of the house that need to be done for you to move in and start saving on rent.
For example, installing steel doors and windows on one section of the house could allow you to move in and complete the other parts in phases. This would save you the amount that is currently going into rent, which you can then redirect to acquiring some of the required accessories such as tiles.
Regarding the Nyandarua farming project, I would advise against taking a loan at this stage. While agribusiness can be profitable, it carries significant risks especially when managed remotely – including delayed cash flows, losses due to poor supervision, weather and disease risks, and the learning curve associated with farming. Debt would therefore add unnecessary pressure to your finances.
A more prudent approach would be to develop the project gradually using savings.
You could start by fencing the land and then build a basic farm house. Next, focus on one income stream such as potatoes or poultry. As the venture stabilises and you gain experience, you can reinvest profits and expand into additional lines.
If you follow this phased and disciplined approach, you should be able to clear your debt, stabilise your cash flow, and make meaningful progress on your housing and farming goals over the next two to three years without placing undue strain on your family’s finances.
A version of this personal finance question and answer was previously published in the Saturday Magazine. The Saturday Magazine is a publication of the Nation Media Group.
