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Financial literacy: A lifelong skill every comrade should have

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What you need to know:

  • In the prevailing economy, mastering sound money management skills is highly important, regardless of age.


  • This is the only way to avoid making poor financial decisions and to get on the path to financial freedom.


  • In our society, however, there are high levels of financial illiteracy which stem from the older generation’s reluctance to inculcate this vital skill in children at an early age.

According to the Standard & Poor’s Ratings Services Global Financial Literacy Survey, financial literacy is one’s ability to understand essential financial concepts and make informed decisions regarding saving, investing and borrowing. 

In the prevailing economy, mastering sound money management skills is highly important, regardless of age. This is the only way to avoid making poor financial decisions and to get on the path to financial freedom.

In our society, however, there are high levels of financial illiteracy which stem from the older generation’s reluctance to inculcate this vital skill in children at an early age.

University is where most young people get to fully and independently manage their expenses, and it is where financial wellness skills are most required because they will inform how one manages  well into adulthood, yet most comrades are known to make unwise decisions that only serve them in the moment.

This week, four students  firmly on the path to financial independence share relatable financial advice.

Photo credit: Pool


Joseph Reagan Alali, 21
Chemical engineering student at Dedan Kimathi University

Reagan’s financial position as a student is satisfactory. He is a disciplined money manager. His parents send him pocket money every month, and he also has some side hustles.

He doesn’t just spend his money recklessly, he follows to the letter the theory of scarcity, choice and opportunity. Food is his main expense, and in a day, he spends about Sh150 on meals.

He notes that he is constantly looking for ways to multiply his income. For instance, residential hostels at his university are not connected to WiFi, as such, fellow students struggled to afford data bundles, and those who could afford had to make do with slow internet speeds. He thought like an entrepreneur would and bought a router. His plan was to supply them with fast, reliable WiFi at a cost.

He had the router installed and shared the password with only 12 students who paid a sum of Sh500. He knew that both he and the students would benefit from this arrangement. And he didn’t stop there.

He took advantage of the demand for printing services in his campus. Students needed to print hand outs and assignments often, and he saw this as another business opportunity. This year, therefore, he opened a small cyber café just outside the school premises. So far, the cyber café only has a printer and a computer. He, however, plans to buy more equipment.

From the earnings from his two enterprises, Reagan saves about Sh4,500 every month. His goal is to buy a good laptop which he needs for his studies. This he plans to do within the next six months.

He is wary of debt. “I only borrow when I am in a dire situation. I am able to live without debt because I always live within my means,” he says.

In his three years at university, Reagan has seen many students sink into debt after developing a habit of taking quick loans, mostly from mobile phone apps, which they often end up squandering.

“So many students today don’t know how to prioritise their needs and wants. Their expenses are driven by peer pressure. Most of them use the Helb loan for its intended purpose – for school fees, food and rent, but  other loans are usually taken to finance entertainment activities,” he says, and adds,

“If more parents were to be keen on helping their children develop sound financial management skills, we would have a generation of adults who are financially literate. As it is, young people are never taught how to look for, or spend money.” 

Photo credit: Pool


Saralynn Wambua, 21,

Law student, University of Nairobi

Saralynn spends the biggest fraction of her money on reading material such as course books. Whenever she can’t find them online or in the library, she has to buy them. This is unlike most of her college mates who spend more money on food and entertainment.

Every week, Sarlynn’s parents give her a fixed amount of pocket money. She tries to budget for this amount, but mostly she ends up spending it on her never-ending list of household utilities. The rising cost of living has made things even more difficult for her.

She admits to being an impulse buyer, like many of her friends, but says she has now learnt to successfully fight the urge to buy things on a whim.

She is a risk taker, rather than keep her spare cash in the bank or in a safe, she has opted to invest in cryptocurrency.

“There are profits in this digital undertaking,” she says.

Because she knows that the future is uncertain, Saralynn has a bank account  where she saves for emergencies. She avoids loans at all costs, and instant loans have never been her cup of tea. She attributes this to a good financial background. “From a young age, my parents were very keen to teach us about money matters. I have always known that loans are dangerous and should not misused. This is a lifelong lesson that I have carried to date,” she says. 

Inspite of this, Saralynn is not perfect when it comes to money matters. Her weakness is that she sometimes struggles to say no to anyone who borrows money from her.

“I sometimes send all the money I have to someone who needs my help, or I deny myself things that I need so that I can give it to someone. This sometimes ends up messing up my budget,” she says.

Photo credit: Pool


Beryl Omollo, 22

Multimedia University Student
As an undergraduate student, Beryl’s focus is not only on getting a degree. She also wants to attain financial freedom.
To supplement the allowance she gets from her parents, Beryl is actively engaged in a number of activities. She sells women’s wear in her campus and others through an online thrift shop. She is also a scriptwriter.

Beryl describes herself as the quintessential student hustler, and aside from selling clothes and scripting for short films, she also works at a call centre in Nairobi.

“I wasn’t exposed to much financial management knowledge as I was growing up, and this motivated me to go out there and gather as much information as I could so that I can secure my future,” she comments. On expenditure, she pays her rent using the money from her side hustles, while her parents cater for all her other needs. She admits to being an impulse buyer, mostly spending her money on beauty products and trendy clothes.

She has developed a saving culture, but she often saves with a specific, short-term goal in mind. She abhors debt but knows that it is important for investment.

“There are times when you are caught in a tight spot and have no option but to borrow. That is okay, but don’t borrow to finance your lifestyle,” she advises.

Beryl, who is not a beneficiary of Helb, disapproves of the loan.

“I don’t think taking Helb is advisable because I have seen people struggle so much to pay it back after graduation. Also, most beneficiaries of the loan spend it on the wrong things.

“We all need to practice financial discipline. Students should stop relying solely on their parents for financial support, rather, find small businesses they can run,” she says.

Photo credit: Pool


Mitchelle Wambui Njogu, 20
Linguistics and communication student at Moi University

Mitchelle is a visionary. She thinks in numbers. She has attended a number of forums trageting the youth to acquire knowledge on financial management. She has the financial habits of an investor. She describes herself as someone keen on acquiring assets rather than liabilities. Her financial dreams are big despite the little pocket money she gets from her parents.

The 20-year-old lives by the 50-30-20 rule of expenditure. She spends half of her total income on needs, 30 per cent of it on entertainment and 20 per cent on savings. She adds that as a student, she has more needs than wants, therefore, most of her money is channeled to her daily needs.

Mitchelle is a novice in the stock exchange market but she is learning fast. Her long-term plan is to start a project back at home, and for this, she needs Sh30,000. To this end, she saves about Sh500 every month. She has a liking for good and expensive food, a habit she describes as bad for her financial health.

“I love trying out different dishes and flavours, and this often ends up decimating my budget because good food is expensive. This is something I am planning to change,” she says.

According to her, debts can be good or bad, depending on what the money is used for. If it is used for a worthy cause, then one can and should take it.

“But using money you have borrowed to change your wardrobe, go out for lunch or entertain your friends is unwise. The moment I find myself thinking of taking a loan or borrowing money, I remind myself that I am in that situation because I didn’t draft a proper budget in the first place. If we all stuck to our budgets, we wouldn’t struggle so much during emergencies,” she says.

Mitchelle thanks her family for instilling in her a saving culture. Her parents opened a savings account for her when she was in primary school, and this has had a big positive influence on her money habits.

She notes that most of her friends don’t budget for or save their money.

“Most young people I know operate as if entertainment is the most important part of life, and they spend so much money on that. They live on the YOLO mantra, and keep saying that they are living in the moment. I try to de different,” she says.

“To help youth avoid misusing their money, they should be offered lessons on financial skills, same way we are taught communication skills.”