Help! I’m a teacher earning 45k net, but I’m swimming in debts

Help! I’m a teacher earning 45k net, but I’m swimming in debts. Photo | Photosearch

What you need to know:

I would want to buy a plot, a car, build a house and get a solid investment plan. I have only managed to buy two small plots in a rural area in my over 10 years of service.


My name is Jeddy. I am a teacher earning Sh45,000 net.

Due to Sacco loans, I only earn about Sh22,000.

I spend all of this money in a month paying rent, transport and food. I manage to get about Sh5,000 to Sh10,000 from side hustles. But I can’t account for any surplus money I get.

I save Sh2,000 in a sacco but have debts of about Sh450,000. I can’t account for any of the Sacco loans I took.

I also have about Sh15,000 in mobile loans I haven’t repaid. I have, however, saved about Sh200,000 in a bank savings account over the years for a rainy day but my reckless spending habits are drowning me.

I want to reform and build myself. I’m currently single in my 30s and have no marriage plans.

I would want to buy a plot, a car, build a house and get a solid investment plan.

I have only managed to buy two small plots in a rural area in my over 10 years of service.

Please help me.



Benjamin Cheruiyot – Engagement Lead at Abojani Investments, a personal finance and investments advisory firm

Being single, rent should be kept below Sh5,000. Food costs should not exceed Sh6,000 (most schools offer lunch to their teachers) and transport to and from work should be limited to Sh4,000 or less if you move closer to your workplace.

The balance of Sh7,000 can be allocated to water and electricity bills (Sh1,000), social causes (Sh2,000), airtime and bundles (Sh2,000) and Sh2,000 to boost SACCO deposits to Sh4,000.

Increasing your SACCO deposits will enable you more financing leverage for future projects.

From your side hustle earnings, plan to clear your mobile loans and limit such borrowing. It will take three months to do this at a minimum of Sh5,000 per month.

The ease of borrowing from mobile loans inculcates the habit of impulsive spending. Your loan balance, at Sh23,000 monthly deductions, should end in 20 months.  

The sh200,000 “rainy day” fund is losing its purchasing power to inflation. Open a money market fund account where you can transfer Sh150,000 and leave Sh50,000 in the bank account for justifiable quick need for liquid cash.

Once you clear your mobile loans using your side hustle, save Sh5,000 monthly in the MMF account. However, seek to ensure that you raise the bracket you earn from the side hustles to Sh15,000.  

Unless you wish to live in the city, you may build on one of the plots and transfer your teaching services there. Except for good prospects in your current side hustles, moving to a rural area may significantly lower your living costs, besides allowing you to utilise your other plot better by engaging in farming.

In a rural setting, you may also lease bigger land for crop farming. Nonetheless, you may also consolidate the two plots in a sale for a more prime area with a higher return value.

If you must buy another plot, you may have to wait until your current loan is paid off, then borrow a Sh800,000 loan for 60 months, at Sh20,000 monthly repayments.

This will add Sh3,000 to your current take-home pay. With the loan, you may get a plot in a fairly serviced semi-urban area.

A car would make sense if you intend to use it for business. If the need is for personal use, you may want to put the vehicle purchase plan on hold until your finances improve.

By the time your loans (current loan + second plot loan) end in six years, your MMF savings will amount to Sh800,000.

These can be used to erect a foundation for your house and build at your own pace. I will encourage you to increase savings to the SACCO to Sh6,000. This can be sourced from the side hustles kitty. 

As you approach your 40s, be ready to explore wider, more rewarding investment options like infrastructure bonds.

These earn at least 13.72 percent annual interests. Or NSE-listed stocks. Making scheduled purchases of these stocks and studying share price movements will soon make you learn stock trading or dividend investing.

Accumulated savings of Sh100,000 or more can be put into infrastructure bonds. As such your investment plan will be diversified to spread risks and optimise returns.

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