A 29-year-old earning Sh36,000 is currently Sh257,000 in debt across four mobile lenders, with all loans in default for a year.
I am 29 and listed on CRB. I have a Timiza mobile debt of Sh25,000 that has been on default for the past 10 months, a KCB MPesa debt of Sh10,000 that has been on default for one year, a Sh200,000 Equitel mobile debt that has been in default for one year, and a Family Bank advance of Sh22,000 taken on mobile app that is also in default. I earn Sh36,000 per month from an eight to five job that is not permanent and pensionable.
My expenses are: Rent Sh11,000, food Sh500 daily, tithe Sh6,000, water Sh700, power Sh1,000, Barbershop Sh200 biweekly, mum Sh1,000, Sh900 airtime and Sunday church contributions. I would like to get out of this debt but I do not know how to do so. I do not have any savings or investments. Please guide me.
Gabriel
Muthoni Njakwe is an accountant and the author of personal finance book Her Shilling, Her Power: A Woman’s Guide to Financial Freedom
To overcome this debt challenge, you need to be completely transparent with your finances. Start by listing all sources of income so you know exactly how much you earn monthly, all debts including lenders, loan amounts, interest rates, and months in default, and all expenses such as rent, utilities, food, transportation, tithes, and personal spending.
Your total expenses stand at Sh37,000. Rent is Sh11,000, food costs Sh500 per day, totaling Sh15,000 for the month, tithe is Sh6,000, water is Sh700, power is Sh1,000, barbershop expenses are Sh200 twice a month totaling Sh400, support to your mum is Sh1,000, airtime is Sh900, and Sunday church contributions are assumed at Sh1,000.
Your total debt is Sh257,000. With a monthly income of Sh36,000, your earnings barely cover your basic expenses, and your debts are still accumulating interest and penalties, which explains why you feel stuck.
The first step to escaping debt is to aggressively reduce your expenses. Before you can even begin repaying your debts, you need to free up money from your current spending.
Start by identifying non-essential costs and finding practical ways to cut them. For example, food is your biggest expense at Sh15,000 per month. You can reduce this by meal prepping at home, avoiding eating out, and buying in bulk.
This will potentially bring your food costs down to Sh8,000–10,000 per month. Other areas you can consider include the barbershop. Opt for a cheaper haircut or extend the time between visits and airtime, which can be reduced to Sh500 per month.
By cutting expenses by Sh7,000 to 8,000 per month, you will immediately free up money that can be directed toward debt repayment. You may also temporarily stop tithing and reduce your church contributions as you focus on eliminating your debt. For example, halting tithing for two months would free up Sh12,000, while cutting contributions to Sh100 would free up an extra Sh1,200.
This would be enough to pay off the Sh10,000 debt, and leave a surplus of Sh3,200, which can be channelled towards reducing the Sh25,000 debt.
Create a structured repayment plan. Allocate the funds you have freed from expense cuts toward your debts. Not all debts are equal. To make real progress, start by prioritising the debts with the highest interest rates, as these accumulate the most cost over time.
If all your debts have similar interest rates, focus on paying the smallest debts first, a strategy known as the Debt Snowball method. This approach provides quick wins, and gives you a sense of accomplishment and boosts motivation to continue.
You can use this practical approach. In the first two months, focus on clearing KCB MPESA loan by paying Sh5,000 per month.in six to eight months, pay Timiza loan at Sh8,500 a month and from the ninth month, contact Equitel to negotiate instalments. By this point, you will have freed Sh8,000 to Sh9,000 per month to put toward the largest debt, making repayment much faster.
While repaying debts, avoid new borrowing. Freeze all non-essential loans, credit card use, and informal borrowing until your debts are fully cleared. This ensures that your
efforts are not undone and that every shilling freed or earned is used for financial recovery.
Even after cutting expenses, the funds you free up may not be enough to tackle your debts quickly or put you firmly on the path to financial freedom. It is important to supplement your income by exploring side hustles, freelance opportunities, or temporary work that fits your schedule.
Any extra income, even Sh5,000 or Sh10,000 per month, can accelerate debt repayment and reduce the time you spend under financial pressure.
Once your smaller debts are cleared and repayments on larger debts are manageable, build an emergency savings fund. Start by setting aside Sh2,000 to Sh5,000 per month and
gradually increase it until it covers three to six months of essential expenses.
This safety net protects you from unexpected costs, prevents you from falling back into debt,
and provides peace of mind.
Once you have cleared your debts, start saving for an investment. This is the stage where you shift from simply surviving financially to actively growing your wealth.
Begin by setting aside a manageable portion of your income, perhaps Sh2,000 to Sh5,000 per month and gradually increase it as your financial situation improves.
Focus on safe, beginner-friendly investment options such as government bonds, savings plans, or reputable mutual funds while continuing to learn about other opportunities, like stocks or
real estate.
Consistency is key. Even modest contributions made regularly can accumulate into significant wealth over time.
Track everything
Use a notebook, spreadsheet, or phone app to monitor every shilling that comes in and goes out. Keep detailed records of your income, expenses, and debt payments.
Tracking your finances ensures accountability, helps identify areas for further savings, and allows you to clearly see your progress toward financial independence.
By cutting expenses, supplementing income, prioritising debts, creating a repayment plan, negotiating with lenders, avoiding new debt, building an emergency fund, saving for investment,
and tracking every transaction, you can steadily regain control of your finances.
If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered on this column.
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