My name is Samson and I’m 24. I am starting a six-month internship on April 1 in Nairobi. I will be paid Sh20,000 every month and I’ve been told based on my performance, I might be transitioned to full-time employment, which will double this pay.
I’ve been living in Juja and working as a boda rider. My mum bought the motorbike for me after getting paid in her chama and selling two sheep. From my boda work, I have been earning a minimum of Sh500 after all expenses daily, working seven days per week.
On good days I earn over Sh1,000 especially from running errands for my dedicated customers. My plan is to use my bike to commute to work to cut transport money. I pay rent Sh10,000 and spend Sh400 on lunch and supper. I have a bank account, but I often struggle to save.
Although I am single, I have a son who is five years old who lives upcountry with my mum and I try to send money to my mum as often as I can.
I want to start a public transportation business, refurbish my mum’s house and secure my son’s future. I do not intend to get married. Please help me plan and achieve this.
Alex Kibebe is the founder of Rubiani Wealth Management Ltd and an investment consultant and business development coach
Your first step towards achieving your investment goals is developing discipline in saving and investing. Without a structured approach to managing your income, it may be difficult to make meaningful progress.
Once you establish this financial discipline, you can systematically work toward securing your child’s future, starting a public transport business, refurbishing your mother’s home and ultimately attaining financial freedom.
The start of a new job in April is an ideal opportunity to build a habit of disciplined saving. A good long-term target is to invest at least 20 percent of your income consistently. Based on your expected salary of Sh20,000, this translates to saving Sh4,000 per month.
Since you have been managing your expenses within Sh15,000 (approximately Sh500 per day), maintaining the same spending habits will allow you to save comfortably. The remaining Sh1,000 can serve as a buffer for any adjustments or unforeseen expenses that come with transitioning to your new job.
To maximise returns while staying committed to saving, I would advise you to invest the Sh4,000 in a Money Market Fund (MMF).
An MMF is a convenient investment option that offers reasonable interest on your savings while keeping your money accessible when needed.
Compare different MMF providers and choose one that offers competitive returns. Opt for a fund with a slight withdrawal delay of two to three days. This small barrier helps prevent impulsive spending.
Another effective strategy is setting up a bank standing order to transfer your savings to your MMF as soon as your salary is deposited.
Automating your savings removes the temptation to spend first and ensures that saving remains a priority.
If you need extra cash for unexpected expenses within the month, avoid dipping into your investments. Instead, consider using your boda boda to earn additional income in the early mornings, evenings or on weekends. This way, your investments remain intact and continue growing toward fulfilling your financial goals.
You can utilise the funds in your MMF to cover your child’s school fees, medical expenses, and other emergencies. Over time, this fund will also help fund your child’s future expenses.
If your income increases to Sh40,000, continue saving 20 percent, which means setting aside an additional Sh4,000.
Consider directing this extra amount into a second MMF specifically dedicated to funding your long-term goals. Prioritise these goals strategically—starting with raising capital for your public transport business, as this could increase your income and provide more funds for your other goals.
Once you’ve established the business, you can then focus on refurbishing your mother’s home and in the long run, work toward building passive income streams for your financial freedom.
To achieve this freedom, explore investment options such as Treasury Bonds and real estate.
These investments will provide consistent passive in-flows over time. As your income grows, ensure that you maintain the habit of saving and investing at least 20 per cent of your income.
By staying disciplined and following through with this plan, you will steadily work toward fulfilling all your goals and achieving financial freedom while securing a brighter future for both yourself and your child.
If you have any money problems, or if you’d like advice on managing your finances, feel free to get in touch at [email protected].
