A Kenyan man has sparked an online debate after sharing how he spends his Sh100,000 monthly income.
In an online post, the man revealed that car loan is the biggest expense, which consumes 47 percent of his income.
He spends Sh47,000 on the car alone. This includes car loan repayment (Sh30,000), fuel (Sh13,000), and service (Sh4,000).
Other expenses include house rent (Sh21,000), Helb (Sh4,000), food (Sh8,000), clothing (Sh3,000), shopping (Sh5,000), internet (Sh3,000), entertainment (Sh4,000), and parents’ upkeep (Sh5,000).
“Back to the broke life, the cycle do not end,” lamented the man in the post.
Responding to the matter, Emmanuel Cheruiyot, a financial expert at Abojani Investments advised the man to sell the car and direct its expenses to investments.
Cheruiyot also recommended setting up a business for the parents for their own support to reduce high dependency.
How family men in Nairobi earning Sh72,000 end up broke every month
“The man should sell the car, clear the loan, direct car expenses (loan + service) totalling Sh47,000 to investments. Sh5,000 should be enough for commuting.
“Go slow on buying clothes often. Empower parents with a business to limit their dependency,” Cheruiyot advised.
Dominic Karanja, a personal finance and investment consultant advocates for the use of the 50:30:20 budgeting guideline: allocate 50 percent of your monthly income to essential expenses, 30 percent to discretionary spending, and 20 percent to savings and investments.
Karanja says that one should look for areas where they can reduce spending, as well as explore ways to boost their side hustle income by upskilling or taking on an additional project.
“As you near retirement, focusing on saving for it becomes essential. Building up your pension savings will help you enjoy a comfortable life after you retire and offer tax advantages. Set clear retirement goals and estimate the amount of money you’ll need.”
“Generally, it’s recommended to aim for 70-80 per cent of your pre-retirement income to maintain a comfortable lifestyle after retirement. Determine how much you need to save and develop a plan to reach that target. Start contributing to a retirement savings plan as soon as possible,” Karanja advised.
