I’m 25, Why am I still broke even committing to pay tithe?

My name is Jimmy. I’m 25 and make Sh20,000 to Sh45,000 monthly from doing online jobs. At the end of the month, though, I am left with Sh1,000 or less. This has been puzzling since I earn over Sh20,000. I don’t pay rent. I mainly use the money to eat and purchase devices for my personal projects which comes to a total of almost Sh9,000 per month. I also spend on black tax (helping relatives with emergencies). I recently believed that I wasn’t doing well financially because I don’t pay tithe and started paying but I am still not improving. I have read the book Rich Dad and Poor Dad which is against saving money and so I don’t save. Should I start saving? Should I stop tithing? What do I do to get out of this situation?

Rhina Namsia, the founder of The Acemt Consulting, a training and consultation company that provides financial planning and investment advisory.

The fact that you finish all the money you earn without a trace means that you have no proper financial planning and goals for your future. Ask yourself who you are, what are your values as a person and what you desire to achieve in one, five or even 10 years. These will define your goals which in turn should be able to align with your finances. For example, do you wish to do further studies, do you wish to own a home in future, what do you do for fun, travel? Then start saving towards these defined goals.

At 25, there’s a lot to learn about money management. Invest in financial literacy and get to understand the difference between saving and investing, money management, and how to multiply money responsibly and grow wealth. It’s great that you have read Robert Kiyosaski’s, Rich Dad, Poor Dad. It shouldn’t stop at that. There are several other books that talk about money on different topics. Rich Dad, Poor Dad speaks about using your money to build wealth by acquiring assets and not liabilities, it speaks about debt management, and so much more.

Saving is simply putting money aside for future use and it is very important as it covers liquidity when needed. Investing on the other hand is buying assets that can give you back a return in future. What you need are some investments besides the savings in your portfolio.

As a beginner use the 50/30/20 rule that says 50 percent of your income should cater for your basic needs, 30 percent to your wants, in this case, can be entertainment, lunches, or emergency funds can go here, and 20 percent into savings and investments. This way once your earnings come in they will be effectively directed where they need to be.

Tithing is not a bad thing if you’re a believer. It shouldn’t, however, make you think that it will improve your finances if you your financial management is poor. It is your financial habits that define what you end up with in the end.

Track how you spend your money and where it goes. It seems most of it is black tax. Include black tax in your category of wants and set money aside for it. You see, you give out all your money because you have no ambitions and goals of your own. People are using your money to meet their goals and needs because you have none for yourself.

Once you have them, you will be able to say a firm no to your relatives. Stop enabling them to depend on you. If you can’t say no when earning Sh20,000, it will be worse when your income increases. Earning an irregular income can be challenging in so many ways as well. Do an average of what you earn per month and create a budget. Any extras can then go into investments and savings.

In summary, put the following into practice and you will see a difference;

1). Invest in yourself and more knowledge on financial literacy. Read more books on investments and money management.

2). Define your values as a person. These values will help you build on current and future financial goals.

3). Track your spending. Account for every penny that goes out. This way you will be able to know where your money goes.

4). Have a budget. This should be a tool that incorporates your goals above and by using the 50/30/20 rule, you can be able to allocate your income well. This category can help you know if you need to improve your income streams.

5). Lastly, learn to say No to extra black tax and pay yourself first.

If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered in this column.