How to manage 50K salary in Kenya

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More than 30% of Kenyans earn a salary of Ksh 50,000 per month.Assuming your net salary is Ksh 50,000, how will you manage this money and remain with a percentage for savings and investment? It’s a challenge considering that life has become tough and almost unbearable, things are expensive.

With a salary of Ksh 50, 000, look for a cheap house to rent, probably an apartment. Assuming that you live in Nairobi, you will automatically look for a house in a middle income like Umoja, Pipeline, Kasarani, Rongai or Ngong.Apply the 50-30-20 rule where 50% goes to rent and other basic necessities, 30% goes to miscellaneous expenses and 20% to savings and payment of debts.

One thing I will caution you is against taking unnecessary mobile loans, they lead to addiction and eventually lack of self-control. Another thing to avoid is buying a car. A car is a liability for low income earners. Imagine insurance alone will consume over Ksh 50,000 yearly, servicing will consume over Ksh 20,000 yearly yet your salary is just Ksh 50,000.You should also avoid gambling and taking of alcohol.

If you manage to avoid such things, you will be able to survive on Ksh 50,000 and remain with some money to save.

Here is how to budget for the money:

Rent—Ksh 10,000 to Ksh 15,000

Food and shopping—Ksh 15,000

Electricity, water and other necessary bills—Ksh 3,000

Transport—Ksh 7,000

Other expenses—Ksh 5,000

Savings Ksh 10,000

Every month you will be saving Ksh 10,000.In a year, the total savings will be Ksh 120,00.

We can round off to Ksh 80,000.

If you save Ksh 80,000 monthly, in 5 years you will save Ksh 40,000 which is enough to buy a plot in Kamulu.

The best way to save is to join a Sacco where you buy shares. Every year you will be earning dividends. After 5 years, take a loan, buy land and build your own house.

For 5 years, your shares will be worth Ksh 400,000.You will be given a loan of up to Ksh 1.2 million.

If you already have a home, save the money in fixed deposit account where you are not allowed to withdraw anyhow. Alternatively, invest in money market and earn interest daily. With savings of Ksh 400, 000, you will earn interest of Ksh50,000 annually from money market.

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