I earn Sh71,000, how can I buy my jobless man a taxi?

I’m 31 and earn Sh71,000. I’ve taken in a jobless boyfriend, who I give a monthly allowance. How do I find money to buy him a taxi to keep him mine?

My name is Priscilla, a mother of one. Although I am unmarried, I have taken in my boyfriend who has been jobless for five months.

My budget is as follows: Rent Sh9,000, food and groceries Sh15,000, GoTV Sh1,850, water and electricity Sh2,000, boyfriend Sh10,000, transport Sh5,000, salon and fashion Sh8,000, PP1 fees Sh15,000 per term, mum Sh5,000.

I would like to take a Sh300,000 bank loan to renovate my mum’s house in the village and fulfill a vow that I made when I graduated from university. I don’t have any savings and investments.

My boyfriend is also pressuring me to take a loan and buy him a small car for a Bolt taxi business. He’s threatening to quit the relationship if I don’t. What do I do?

Robert Ochieng’, the founder and investment advisor at Abojani Investments

One of the best ways to organize your finances around your needs, wants and investments is using the 50-30-20 rule. Needs are things that you need for survival like rent, fare, monthly shopping and utility bills. Wants are things like leisure, entertainment, and gym subscriptions.

Savings and investments are plans for your short and long term goals such as retirement or buying a house. You are spending Sh44,600 on needs and Sh15,000 wants, meaning you are spending 62 per cent of your net income on needs and 83 per cent on wants.

From your monthly income, there is Sh11,900 that is unaccounted for. It is important to include everything in your budget.

You need to find a way to start saving, even if it is just Sh5,000 per month, which would be Sh67,846 in 13 months in a money market fund. You should work towards savings at least 20 per cent of your net income, which would be about Sh14,000 per month.

In the absence of the additional boyfriend obligations (allowance, shelter and food) you have taken, a readjustment of your finances would enable you to increase your savings and expand to options such as Saccos.

Sacco monthly savings of Sh10,000 with 12 per cent dividends would give you about Sh134,000 in just one year.

Review your needs to be less than 50 per cent of your net monthly income. You are spending 11 per cent of your net income on beauty, which is an equivalent of three working days in a month. Reduce this to a reasonable amount. You can also buy groceries in bulk to try reduce the monthly spend.

Before taking the Sh300,000 loan for your mum, look at your finances logically. First, establish an emergency fund worth at least three times your monthly needs to cater for any financial emergency.

Thereafter, consider the financial implications of borrowing Sh300,000 in a high interest environment. Borrowing unsecured loan from a bank at 18 per cent, for example, will result to monthly repayments of Sh7,618 for five years while borrowing the same amount from a Sacco at 12 per cent will result in a monthly repayment amount Sh6,673 in five years.

You only need a pay slip for a bank loan while for a Sacco you will need savings of at least Sh100,000 and guarantors. Choose wisely. Also note that because of the current high interest rates and the rising cost of living, it would be wise to put on hold capital expenditures such as taking a Sh300,000 loan in the short term.

Understand that the man is your boyfriend and not a boyfriend to your money. Set appropriate money boundaries, and note the difference between a husband and a boyfriend. Examine the reasons behind his joblessness.

What are his skills? Why is he unable to venture out and hustle? What is the purpose of the Sh10,000 you give him every month? What has been his contribution over the last five months over which you have provided him shelter, food and allowance? How much longer can you sustain this?

Taking a loan to buy him a taxi is not a show of love, it is caving in to manipulation. If it’s not prudent to take Sh300,000 loan for your mum, why would you take more than Sh600,000 loan to buy a non-family member a vehicle?