How do I survive in Nairobi with a 29k net salary?

How do I survive in Nairobi with a 29k net salary? Photo | Photosearch

What you need to know:

I have a one-year contract that was extended this month. Kindly assist me to attain financial independence and be frugal.

My name is Gerald. I live in Ngara, Nairobi with a net salary of Sh29,449. My expenses are; Rent Sh6,500, food Sh3,000, transport Sh3,000, Sacco savings Sh4,000 (Haven’t saved for the last 2 months), airtime Sh1,000, leadership training Sh2,000, spouse Sh3,000, miscellaneous Sh3,000. I have a credit card loan with a balance of Sh29,000. I used to pay Sh5,000 monthly then defaulted. I have an online business that I am still funding from my income. It isn’t stable yet. I have a one-year contract that was extended this month. Kindly assist me to attain financial independence and be frugal.


Robert Ochieng’, Investment and Financial Advisor at Abojani Investments

Your total expenses should amount to Sh30,500 against Sh29,449 income if you hadn’t defaulted on your credit card repayment and Sacco savings. With the two defaults, total expenses amount to Sh21,500. 

You have not serviced the credit card loan repayments nor contributed to the SACCO for the last two months, possibly due to commitments to building your online business with about Sh8,000 hived from these two expenses. It is important that you settle the credit card loan to avoid accumulating unnecessary interest and hurting your credit score. It’s also important that you reinstate the Sacco savings as you don’t have any other savings or investments. Your rent is only 22 percent of your net salary. You've made efforts to keep expenses low. 

Keep at this over the duration of your contract. Before you resume savings, focus on eliminating current debt first. Squeeze Sh1,000 from miscellaneous expenses and Sh9,000 due to Sacco savings and credit card repayments, and channel the entire total of Sh10,000 towards the credit card loan every month. This loan should be settled in three months. 

Once this is done, increase your Sacco savings to Sh7,000 and commit Sh3,000 towards your side hustle until it turns profitable. Saving Sh7,000 monthly will amount to Sh84,000 in the first year.

If you are fortunate to get your current contract extended by a few more years, a consistent savings habit over three years will accumulate to Sh290,000 inclusive of annual 10 percent interest. This will allow you to borrow up to 3 to 4 times your deposits. For financial stability, you need to invest in both fixed and liquid assets. A Sacco loan of Sh800,000 can fund the acquisition of a plot, with repayments of Sh18,000 for 72 months. 

With future improvement in your net income and steady earnings on your side hustle, you should be able to afford these repayments. Use leadership training as an opportunity to scale the corporate ladder and bargain for higher pay. Once this training is complete, an additional Sh2,000 in disposable income will be released. 

Together with your miscellaneous allocation, your disposable amount should rise to Sh4,000. If your online side hustle becomes self-sustaining and profitable, the monthly disposable income should rise to Sh7,000. This money will earn you an extra Sh290,000 if saved in another Sacco for a period of three years at a minimum of 10 percent interest. 

You need to have a realistic metrics and timelines for this side hustle in order to measure its growth rate and probability for income generation. You have an allocation of Sh3,000 for your wife. What does she do for a living? The goal for both of you should be for her to create an extra source of income. Multiple sources of income will safeguard your family’s financial position if your contract isn’t renewed after the one-year extension period. If your spouse is earning, and with your disposable income going into savings, you may both agree to reallocate the Sh3,000 to personal entertainment. If she’s working too, she should have a budget and money goals. 

Her earnings can be diversified into liquid assets like stocks, money market funds, treasury bills, and bonds over time to enhance your family’s liquidity. You both may need to enroll in master classes on proper investment in liquid assets.


If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered in this column.