A 36-year-old woman earning Sh75,000 a month is seeking advice on how to budget her money as she plans to retire at 45.
According to a post shared by Benjamin Cheruiyot on his X account, the lady, identified as Jane, plans to undergo in vitro fertilisation (IVF) and establish a charitable trust after leaving formal employment.
However, her current budget and savings rate could make it difficult to achieve these goals within her planned timeline.
Responding to the matter, Cheruiyot, a financial adviser at Abojani Investments, reviewed Jane’s monthly expenses, savings and long-term ambitions before recommending changes to her financial plan.
According to him, her expenses include Sh25,000 for rent, Sh15,000 in money market fund (MMF) savings, Sh8,000 for food and shopping, Sh8,000 for transport, Sh5,000 for supporting her mother, Sh7,500 in tithes, Sh2,500 for utilities, Sh2,000 for airtime and internet, and another Sh2,000 for miscellaneous expenses.
She has accumulated Sh1.2 million in MMF savings and intends to spend Sh500,000 on an IVF procedure.
However, Cheruiyot identified her housing costs and monthly savings rate as major obstacles to her ambition of retiring at 45.
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He noted that her rent accounts for approximately 33 per cent of her monthly income, leaving limited room to increase savings without compromising other financial commitments.
Cheruiyot recommended that she reduce her rent to Sh20,000 and redirect the Sh5,000 difference into her MMF savings.
He also advised her to increase her monthly savings from Sh15,000 to Sh25,000 if she intends to achieve financial independence by 45.
According to his projections, saving Sh15,000 monthly could grow her investments to approximately Sh4.5 million by age 45, an amount he estimates would fall short of the Sh6 million required to generate Sh50,000 in monthly passive income.
He warned that maintaining her current savings rate could force her to continue working until around age 50 rather than leaving employment at 45.
To protect her savings while pursuing IVF, Cheruiyot advised Jane to separate the Sh500,000 allocated for the procedure from her emergency and long-term investment funds by placing it in a dedicated MMF account.
The remaining Sh700,000 would be retained as her financial independence fund.
Under his proposed plan, Jane would save Sh20,000 monthly for the next six months, adding Sh120,000 to her investments.
Including an estimated Sh42,000 in interest, her financial independence fund could grow to approximately Sh862,000 before the IVF procedure.
Cheruiyot noted that if the procedure succeeds in the first cycle, she would still have the Sh862,000 fund available for further investment and growth.
Beyond her retirement plans, the financial adviser also addressed Jane’s ambition to establish a charitable trust at age 45.
He advised her to begin volunteering at a children’s home to gain experience, build professional networks and develop a track record relevant to her future charitable work.
He also pointed to registration requirements, noting that the NGO Coordination Board requires proof of annual income of Sh1 million for the relevant registration process.
Cheruiyot cautioned that retiring at 45 may be too ambitious given Jane’s competing financial priorities, including fertility treatment, supporting her mother and building a charitable organisation.
He suggested that extending her working years to age 50 could give her more time to accumulate wealth and pursue her plans without placing excessive pressure on her finances.
“Age 45 looks too ambitious for your goals. You could still work until 50 to comfortably actualize your dreams without undue financial pressure,” he advised.
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