'I also want to own a three-bedroom apartment in a good location like Two Rivers.'
I am single and childless, in my late 30s. My monthly net salary is Sh195,000. My expenses are as follows: Rent Sh45,000; Food; Entertainment, and miscellaneous expenses Sh50,000; Mum Sh10,000; Brother in college Sh5,000; Bank loan instalment Sh16,000 (Outstanding balance Sh640,000); Vehicle instalment Sh45,000 (Outstanding balance Sh405,000. Car bought at Sh1.25m, I paid Sh800,000 and got Sh450,000 financed by microfinance); Fuel Sh6,000 to Sh10,000; Savings account has Sh60,000. I would like to clear these loans and build my mum a new three-bedroom bungalow. It's a promise that I made to myself which I am yet to fulfill. How do I achieve this within one to two years? I also want to own a three-bedroom apartment in a good location like Two Rivers.
Muthoni Njakwe is an accountant and the author of the personal finance book Her Shilling, Her Power: A Woman’s Guide to Financial Freedom
Start by directing what’s already in your hands. The Sh60,000 in your savings account and your Sh16,000 disposable income into a Money Market Fund (MMF) or a high-yield savings account as you begin implementing the next steps. Ensure that whatever you have is earning you returns as you restructure your finances.
Before tackling your debt, make smart adjustments to create breathing room. Your rent currently takes up about 23 per cent of your income, which is slightly above the recommended 15–20 per cent range. Consider moving to a cheaper house and save Sh10,000–15,000 every month. This is a short-term, strategic move that will accelerate your financial growth. Spending Sh50,000 per month on food and entertainment is quite high. You can comfortably reduce this to around Sh30,000–Sh35,000.
These two changes alone can free up Sh25,000–Sh30,000 monthly, which you can redirect toward loan repayment or targeted savings. If you truly want lasting financial freedom, you’ll need to tighten up for a few years. It is a temporary sacrifice for a permanent reward.
Next, clear your debts strategically. Start by prioritising the vehicle loan, since microfinance institutions charge higher interest rates than banks. Your goal should be to clear it as fast as possible to reduce the overall interest burden. Take the Sh10,000–Sh15,000 you freed up from adjusting your rent and food budget and redirect it toward this loan. When combined with your current Sh45,000 monthly instalment, you’ll be paying around Sh55,000–Sh60,000 per month. With this approach, you can clear the vehicle loan within eight to 10 months, which will free up a good portion of your income. Once you’ve cleared the vehicle loan, channel the entire Sh55,000–Sh60,000 monthly payment directly toward your bank loan, in addition to the Sh16,000 you already pay. Your total monthly repayment will be Sh71,000–76,000. At that rate, you will clear the Sh640,000 bank loan in about nine months. This means that within 17–19 months (less than two years), you can be completely debt-free.
Once you’ve cleared all your loans, the next goal is to fulfil your promise of building your mother a house. A modest yet elegant three-bedroom bungalow in most parts of upcountry will cost you between Sh2.5 million and Sh5 million, depending on design and finishes. After debt repayment, you’ll free up about Sh70,000–80,000 monthly (your former loan payments and the savings from rent and food adjustments). If you save Sh80,000 per month in a money market fund earning about 10 per cent annual return, you’ll have roughly Sh1 million after one year and around Sh2.1 million after two years. This means that within two years after clearing your loans, you can comfortably begin and complete your mum’s home without taking new debt. This project is achievable in about three and a half years.
Once your mother’s home is complete, you can now shift your focus to building your own house. By then, you’ll be debt-free, more financially confident, and in full control of your income. A modern three-bedroom apartment in a prime location like Two Rivers currently costs between Sh17 million and 25 million, depending on the design, finishes, and amenities. With your current income, owning that will require patience, strategy, and discipline. Essentially, you will be playing the long game. Here are three practical ways you can make it happen.
Rent-to-Own model: If you save Sh100,000 per month in a Money Market Fund, unit trust fund, or short-term bonds, with a projected annual return of 10 per cent, you could have Sh1.26 million in one year, Sh2.7 million in two years, and Sh4.3 million in three years. This means that in three years, you could have Sh4.3 million , which can work as a strong deposit for a rent-to-own plan. With rent-to-own, you pay an upfront deposit, usually about 20 per cent of the property value. After the deposit, you pay a fixed monthly fee, let’s say around Sh90,000 per month, which is split between rent and ownership (equity). This means that part of your payment is just like paying rent to live in the apartment, while the other part goes toward gradually owning the property. Over two to three years, the equity portion of your monthly payments adds up, which gives you an ownership stake in the apartment. At the end of this period, you will have a solid equity base, which can either allow you to fully own the apartment outrightly or take a smaller, manageable mortgage to cover the remaining balance. In other words, you start living in your dream home immediately, while turning your payments into an investment rather than just rent.
Start small, upgrade later: You can begin by purchasing a one or two-bedroom apartment priced between Sh6 million and Sh10 million. With Sh4.3 million in savings, you already have a big portion of the purchase price covered. For the remaining balance, you can take an asset financing loan of around Sh1.7–5 million, depending on the property price and your available savings. Once you own the apartment, you can rent it out, using the rental income to gradually pay off the loan. As the loan is cleared, the property becomes fully yours. Later, you can leverage both the rental income and your accumulated savings to upgrade to your dream three-bedroom apartment. With a higher income, you’ll also meet the 40 per cent debt-to-income ratio guideline that most lenders use to qualify borrowers for a mortgage on properties worth Sh17–25 million. You may also choose to purchase your own plot in the outskirts of Nairobi, and build a four-bedroom mansion with your own design and at your own pace, which will be more affordable and tailored to your individual taste.
The last option is to save consistently and take advantage of investment opportunities that build wealth gradually. With savings of about Sh4.3 million in three years, you can diversify into dividend-paying stocks, government securities, or even a small business that generates consistent income. The goal is to build multiple income streams and let your money work for you. You can also improve your skills, marketability and employability, and have an edge in negotiating for salary increments or attracting side hustles such as through consultancy.
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