I’m a teacher earning Sh13,000 because of loans I can’t account for
Be aware that a vague expenses record points to financial indiscipline.
What you need to know:
- Eliminating bad money habits like excessive borrowing takes a very strong conviction.
- The ease of borrowing from mobile loans encourages impulsive spending rather than investments.
My name is Fidelis, a primary school teacher earning Sh13,000 due to loan deductions. I have a beauty shop but the earnings are not much. I also can't track where the cash goes and I don’t know whether I am making any profits.
I am addicted to debts, hire purchase items and online purchases and I don't how to come out of it. I have been working and hustling for 12 years but I have absolutely nothing to show for it. I took my life savings and invested in the famous Goldenscape project in 2020 but it collapsed and all my life savings went down the drain.
I am also financially crippled because everyone in my life wants financial support and I can't help them when nearly all my salary is deducted because of mobile app loans. Please help.
Robert Ochieng’, the founder and investment advisor at Abojani Investments
Be aware that a vague expenses record points to financial indiscipline. List every coin you have earned over the past three months and each expense that you have spent. This will help you spot where every coin is going, and what you need to cut off.
Do the same with your beauty shop. Get a profit/loss analysis and the operational costs of running this business to know if it’s worth it. You could be running an enterprise that only benefits the landlord and your employees. If there are earnings from this side hustle, use them to off-load your mobile debts.
The ease of borrowing from mobile loans encourages impulsive spending rather than investments. Consider buying consumables in bulk as they are cheaper. Stock dry foodstuffs from markets especially when they are in season. Eliminating bad money habits like excessive borrowing takes a very strong conviction. Have limits on monetary dependency by relatives and friends. Only assist where you can until your financial coast is clear.
Live within your means. This means avoiding hire purchase. List your needs and wants and stick to a budget that achieves them without debts and hire purchase. There is no growth without patience. You may also expand your income streams by offering teaching services. Channel any payments to a savings account, or a money market fund.
Learn from your Goldenscape loss to never fall for get-rich-quick schemes. In future, do your due diligence before investing or consult a certified financial and securities professional. Once you clear your debts, establish an emergency fund of three to six months of your monthly expenses.
Investments that you can try include: Stocks, fixed income instruments and money market funds. You could save Sh5,000 monthly to accumulate Sh65,000 (inclusive of 11 per cent interests annually) in a year to afford you short term goals.
If you have any money problems, send us an email at [email protected]
