My name is Clarence. I’m in my early 30s and a father of a two-year-old boy. I grew up on half-acre shamba. I’m the firstborn and the only son in a family of six, with unemployed and low income earning parents.
I earn Sh79,000 after statutory deductions. I took a bank loan of Sh1.5 million to be repaid by November 2026. This loan has monthly premiums of Sh28,366.
This has been the only deduction from my payslip since October 2019. Additionally, I have a Sh30,000 outstanding mobile loan that has been unpaid for a year and a half now.
My biggest headache is my stalled house project that needs Sh500,000 for furnishing as I don’t have a house to live in right now. I send Sh10,000 to my girlfriend every month for upkeep. My son is joining kindergarten next year and my two last born twin sisters are joining junior secondary school. My other two twin sisters were supposed to join college, but they’ve taken a sabbatical for financial reasons.
The annual tuition fee for my four sisters is about Sh360,000. My son’s schooling will cost Sh36,000 per year. My girlfriend is a primary school teacher with a salary of Sh17,500 per month, which is not enough for rent and upkeep.
My 30s are here and I have no tangible wealth except the incomplete house – no savings, no investments. I live from hand-to-mouth year-in year-out and I’ve been down this rabbit hole for almost six years. Please help me manage the Sh51,000 I pocket each month.
Emmanuel Mbogholi, Founder at PlanWise LLC, an advisory consulting firm that educates, strategises and guides clients towards success.
Understandably, balancing your numerous responsibilities and financial challenges has become overwhelming. You can, however, turn your situation around by focusing on actionable steps that will help you get back on track and build a more stable future.
For you to realistically achieve this, you need to differentiate between your immediate priorities and deferred goals that you can work towards once you’ve realised a level of financial control.
From what you’ve shared, I’d say your debt repayments need to be addressed first.
Secondly, you need to ensure that your family’s essential expenses like housing, education and basic upkeep are met. Once these two are in place, you can embark on other financial goals.
As for your deferred goals, for now you may need to delay non-essential home furnishing as what is of more importance is to complete your house.
Also, as much as it’s commendable that you want to support your sisters, I strongly recommend that you consider possible alternatives such as scholarships, work-study programmes or other financial aid options available for their education.
Not only will this give you some much-needed breathing space, but it will also help you in the long run to manage your family’s current level of dependence on your personal finances.
Let’s now get into the specifics of your action plan. First, you need to create a budget. I propose you start out with the zero-based budgeting rule owing to your multiple financial obligations.
This requires you to allocate every single shilling of your income to specific expenses or goals. Start by categorising your spending into emergency funds, essential living costs, fixed expenses, debt repayments and savings and investments.
Begin by setting aside a small amount, say Sh5,000, for an emergency fund to help you offset any future unplanned expenses such as sickness, loss of income or even critical illness from your immediate or extended family.
Aim to save at least three to six months’ worth of essential expenses. Save these funds preferably in a money market fund, where it will earn a decent interest return while making it not easily accessible until required.
Since your bank loan of Sh28,366 is deducted upfront, this leaves you with Sh45,634.
The next step is to allocate spending for your essential living costs such as parental upkeep, household expenses, utilities and groceries. A monthly upkeep of Sh15,000 should be adequate to cover this, leaving you with a balance of Sh30,634.
Given your girlfriend’s monthly fixed allowance of Sh10,000, you will now be left with Sh20,634, which you can begin allocating a further Sh3,000 per month towards your son’s school fees.
Out of the remaining Sh17,634, I suggest you allocate Sh12,000 to aggressively pay off your debts, starting with the mobile loan owing to the high interest rates charged on digital loans.
At this point, you are left with a disposable income of Sh5,634, which you can allocate to building an investment portfolio that will help you meet future financial needs such as your child’s further education, building passive income such as starting a business, or even begin saving towards retirement.
Channel this remaining income into a medium- to long-term savings vehicle, such as an insurance savings policy, an education policy or even build it up to allow you to invest in good-yielding instruments such as treasury bills or government bonds. You can also save it through a Sacco.
Once you have paid off your debts, you can use the increased income to complete your house or even invest in other investments such as real estate.
While working towards this, also explore additional income sources such as part-time work or side hustles that can supplement your income and help you accelerate paying off your debt and freeing up more money to work for you.
Focus on developing your skills or hobbies into income-generating activities. You could also invest in professional development that could lead to better-paying job opportunities in future.
With an allowance of Sh10,000, your girlfriend now has Sh27,500 per month. Since you’re already invested financially and emotionally, sit down together and develop a budgeting and savings plan for this money the same way you would if your relationship was to progress into marriage.
As your sisters wait to join college, have them explore the possibilities of sponsorships offered through the higher learning boards, CDF and county education funds, and individual school programmes.
Remember to keep track of all expenses and income as well as to review and adjust your budget at the end of each month based on actual spending and any changes in circumstances.
If unexpected expenses arise or if there’s a change in income, adjust the budget, accordingly, always ensuring that every shilling is accounted for and assigned a purpose. It is important that you stay focused on these actionable steps while being patient with yourself.
Financial stability doesn’t happen overnight, but with a structured plan such as this one and perseverance, you can make significant progress. Take one step at a time and you will begin to notice the progress.
If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered on this column.
