I’m a married nurse earning Sh45,000; I’m always broke by the 5th of every month

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Nation Media Group

My name is Rita. I work as a nurse and earn Sh45,000 per month. My monthly budget is as follows: Sh7,000 goes to Sacco savings and loan repayment; Sh11,000 goes to housing; Sh5,000 goes to house-help; Sh3,000 is for my parents’ upkeep; Sh2,000 is for my husband’s pocket money (he is in college); Sh2,000 is for my niece’s daily fare to school and her personal needs; Sh5,000 is for my household food and other expenses; Sh2,000 is for diapers and baby food for my one-year-old; Sh3,000 is for my fare to work; Sh1,600 is for water and electricity; Sh2,000 goes to a Shylock (I have unpaid interest of over Sh10,000 that I borrowed); and Sh700 goes to my chama. I am unable to save anything in my current situation. I do not have a side hustle and have previously tried businesses but lost capital. I would like to buy land in Kikuyu and build a three-bedroom house for my family. Please advise me. I barely have any money left by the 5th of each month and I keep borrowing.

Chacha Nyaigoti Bichang’a, a financial coach at Chachanomics Consulting Firm and the author of Mastering Your Money, responds:

1) Acquire financial literacy:
Your financial challenges stem from a lack of personal financial education. This is why you’ve struggled to save for investment and have lost capital in previous business ventures. It’s often said that you can’t solve the same problem with the same mindset that created it. To change your financial situation, you need to reprogramme your mindset. Enrol in a financial coaching programme, hire a good coach, and learn essential financial skills, such as goal-setting, budgeting, expense tracking, saving for emergencies and investments, debt management, and safeguarding assets to avoid unnecessary losses. Once you learn these skills, it’s crucial to have an accountability partner (preferably a reliable financial coach) to help you implement and maintain these new financial habits until they become second nature.

2) Audit your financial lifestyle:
This involves reviewing your financial habits, beliefs, and expenditures. Start by monitoring and recording your expenses daily, weekly, and monthly to identify areas where you overspend. Categorise your expenses into three groups: very essential/necessary (rent, household goods, including diapers, utilities, fare to work); essential (house help, WiFi, Sacco savings and loan repayment, chama); and non-essential (parents' upkeep, niece’s fare, husband’s pocket money, Shylock loan interest).
You need to reduce overexpenditure on essential expenses, such as rent. At Sh11,000, your rent amounts to 24 percent of your salary, which is well above the recommended average of 15 percent (Sh7,000). Reducing this by Sh4,000 would free up more funds for saving. Consider also cutting down on non-essential expenses, such as your parents' upkeep, your niece's fare, and your husband's pocket money, or at least significantly reducing them to ensure you have enough disposable income for savings and investment.

4) Start a side hustle:
Since your salary is already stretched thin, consider starting a business that aligns with your talents, available resources, and skills as a nurse. For instance, you could take additional private shifts at clinics and hospitals on a locum basis. Once your finances improve, you might even start your own clinic or dispensary near your home or in a suitable location. You could employ one or two workers (a trainee nurse and a cashier) and manage the clinic during your free time.
Even though you've experienced business losses before, don’t give up. Consider learning business management skills—like handling personnel, managing finances, and branding—to improve your chances of success. A well-run medical clinic can generate significant income, often breaking even within the first three months due to the constant demand for medical care. You could also discuss potential side hustles with your husband, especially those he could do when not in college, such as evening or weekend jobs, to supplement your income.

5) Establish a savings and investment plan:
In line with the budgeting guide above, prioritise 30 percent of your income for savings as the first expense item as soon as you receive your salary. Consider automating your savings through a check-off system. Allocate at least 16 percent (Sh7,000) of your income to your Sacco via check-off. Also, direct 10 percent (Sh4,500) to a reputable money market fund with a modest interest rate of around 13 percent. This fund will act as your emergency savings, growing to cover six months of your monthly recurrent expenditure (Sh241,800).
The remaining 4 percent (Sh2,000) should go towards an insurance policy for your child's education or a life policy that lasts 10-20 years. Any additional income from your side hustle should be directed towards increasing your Sacco deposits, money market fund savings, or additional insurance policies.

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