Welcome to The Coin Confession! We are demystifying how people spend their money by asking everyday people to share their normal spending habits.
Today; a consultant who recently decided to get rid of his bad money habits to start building a better life for himself.
Salary: KES 90,000 — KES 150,000
Profession: Management consultant
Savings: 40% of my salary
‘You need to start saving Brian, its important for your future’
‘…wow KES 2,000, that’s a lot of money you have, how much are you planning to save though?’
‘…don’t forget to put some money away, don’t just spend it all on food, and paying for the internet bills’
If you are like me, these pieces of advice sound like a lecture, phrases that your elder siblings and family members use as the cue to a long abstract chat about why every cent you own is important. Sure, your attention is at its level best, but let’s be honest after 2 sentences you mentally zone out. I was also like that for a long time, mostly because money was (and still partly is) such an abstract topic: Why should I save? How is it important for my future? How will it make my life better if I just keep it away and don’t spend it on things and experiences that are supposed to make my life better? I needed practical tips here.
Between the ages of 20–25 this type of mindset worked. Looking back, this is the time when you literally have zero responsibilities. It’s basically an age gap in your life with a ‘get out of jail free’ card handed to you when it comes to making mistakes and shirking personal responsibilities. You can afford to spend half your salary on mundane items such as clothing, take-out, expensive trips and still recover the cash next month, if you’re blessed with a stable job. You have a lot of personal power! But here’s the catch…nobody ever tells you, or better yet explains how you can use it to build your future! (P.S: I have done the Africa’s Pocket, Your Roadmap to wealth course, and it really opened my eyes to the value of compounding and how you can use it to build the life that you want).
I turned 26 this year, and it was scary. Suddenly, you feel much older than before and your personal responsibilities feel heavier. They have always been there but this time it’s different, you know you’re supposed to be patching up your life together and having some semblance of the life of a responsible adult. You get wiser out of fear and start making intentional decisions. I started with taking my finances seriously and looking back, after 3 months it’s been an easier path than I thought. All I need to do is just start, hold myself accountable, set a goal, break it down into smaller milestones and start smashing those milestones one after the other. By the time you’re done, the monster of a goal wasn’t so undoable after all!
Life Before Savings:
Here is a glimpse of my life between September 2019 to December 2019:
Income: KES 90,000–150,000
Savings: Lol! You’re kidding right? That’s the thing older people do, not me -I still got time! Spend all that money!!
(I’ll just recover it next month right…no biggie) — I feel so sad for my naïve mind and soul looking back now!!
Meals: Take out every day. Every single freaking day, dinner was always from a restaurant that I paid KES 200. That’s approximately KES 5,000 gone!
Weekend events: I’d probably visit a nearby town. My job has me out in different cities over extended periods of time (3–6 months) so I’d spend this time exploring other areas close by. This would approximately be KES 3,000 for the weekend. That’s close to KES 10,000 per month.
Airtime and bundles: Like every other Kenyan, I’m brainwashed by Safaricom and always handed them my money. With their expensive internet rates and lack of Wi-Fi, I’d spend KES 200 every two days.
Transport: My daily commute to work would be approx. KES 200 per day.
Meeting with friends: Whether it’s game night, or drinks at a local restaurant, we all know how much it costs, especially if you’re the generous one in the squad. KES 1,500–2,500 per meet up.
Let’s add this up and see the damage!
Meals — 200 * 30 days = KES 6,000
Weekend events — 3000* 4 weekends = KES 12,000
Airtime and bundles — KES 3,000
Transport -- 200 * 20 working days = KES 4,000
Socializing -- 2000 * 4 meet ups = KES 8,000
That’s KES 33,000 I’m spending unnecessarily. And I haven’t included the cool shirt I see at a store and instantly want to own. Or the days I want to visit a new restaurant and try seafood or buy pizza that’s approx. KES 1,000. Or go out for a movie — these things add up…fast!
Life after Savings:
In January after my birthday, I decided to be a bit more intentional with money. I needed to start saving for my own good, so here are the changes I made. Most of them just involved getting rid of excuses and making a conscious decision to do what’s best for me:
Step 1: Set aside some cash! I mean the second that salary hits your account, take out whatever % you commit to and transfer it to another account, KCB Mpesa, heck even an envelope…it doesn’t matter. Just do it. I allocated approx 40% and promised myself not to touch it again.
Step 2: Looking for cheaper take out options around — it started with me committing to cooking but honestly speaking that hill was too difficult to climb. This is where course-correcting comes in, and working with the budget that I have after setting aside savings.
Step 3: Folks, Safaricom is expensive! Your money is being looted for airtime and data while airtel has cheaper bundle offers. KES 100 for 2GB data mates! Make the switch. (not a paid advertisement).
Step 4: Instead of taking a commute, I chose to walk back home in the evenings. It slashed my costs by half, and the 30-minute walk was good for my body and overall fitness!
Step 5: This here is a bit tricky; it requires a bit of bravery. You don’t need to buy 2 bottles for you and your friends. You can just settle for one, or even just beers instead. Or if you don’t want to drink, suggest new activities that are cheaper and healthier. Your friends won’t judge you. Maybe they will in the beginning, but it won’t be that intense, because real friends don’t do that. That said, I stick to 2 beers per meet up, and suggested activities such as kayaking and going out to try new restaurants/ cuisines (it’s cheaper than those two bottles of Beefeater Gin!)
It did take me a mini -midlife crisis to implement this but the point is I could save by taking it one step at a time. All you need to do is make small habit changes, be consistent, course correct when you go off track and don’t give up on your goals (we’ve all heard of this before and it’s honestly not cliché advice). My mindset plays a big part.
Secondly, I’ve realized you have more of an advantage when you’re younger. You don’t have kids and some of us don’t pay rent yet so use it to your advantage. This is what I meant by the personal power nobody ever tells you about. I made so much progress in 3 months and when I look back, I should have started this when I was 22. So, if you’re younger than me and reading this just start, even if it’s KES 50 a week. The compounding effects are astonishing!
If you need a tool to help you set goals, budget for those goals and then track your expenses, check out the Budgeting Tool that Africa’s Pocket has (just DM them or contact +254 741 665 501 to get access to the tool for KES 1,500).
So that has been my journey so far guys. I hope that you have learned a thing or two from my previous mistakes. Also, thank you Africa Pocket’s for helping me share my story. Ciao!
As Lang’at mentioned, it’s all about taking that first step. It may seem overwhelming but Africa’s Pocket is committed to being with you throughout your journey to financial success.
Check out the tools and resources that we have on our website today, to get you started regardless of where you are on your financial journey!