I am 27 and employed on a Sh48,000 salary. I have been in a relationship with my fiancé for one year and she has secured a slot to join a medical college in January 2026. I am planning to take a Sh800,000 bank loan to fund her education. My bank says I will get the loan at 17 per cent interest with monthly repayments of Sh23,000 for a total of Sh1.1 million. My main expenses are as follows: Rent Sh10,000, girlfriend Sh5,000, groceries and shopping Sh15,000, power and water Sh1,500, transport Sh4,000, mom Sh2,000, dad Sh1,000, clothes and grooming Sh3,000, Ziidi MMF Sh2,000, the rest is miscellaneous expenses. My friends think I am making a mistake, but I love my girlfriend. How do I adjust my budget to afford this loan?
Dominic Karanja, a financial planning and investments consultant
Your dedication to supporting your fiancé’s education is commendable. However, taking a loan is significant risk. A monthly repayment of Sh23,000 would account for 48 per cent of your income, whereas best practices recommend debt repayments should not exceed 30–33 per cent of gross pay. With your current expenses, introducing a Sh23,000 loan repayment would lead to a deficit. To address this, strive for the 50/30/20 budgeting rule (50 per cent for essentials, 30 per cent for discretionary spending, and 20 per cent for savings or debt). However, your essential expenses already comprise approximately 63 per cent of your income. Therefore, considerable adjustments are necessary. Utilising tools such as M-Pesa statements or free budgeting applications can help track your finances and identify areas for improvement.
Don’t eliminate essential expenses entirely, talk through any changes with your fiancée and family to ensure their support. Living on Sh25,000 after loan deductions means making significant lifestyle adjustments. Giving your girlfriend Sh5,000 in pocket money isn’t realistic if you also must pay a Sh23,000 education loan for her. She should take up a part-time job or ask her family for help to meet her personal expenses. Be clear that while you’re handling her school costs, she needs to manage her daily spending.
Allocating Sh10,000 for rent from a total monthly budget of Sh25,000 poses considerable financial risk, as it accounts for 40 per cent of available resources. Transitioning to accommodation costing Sh7,000 per month could yield annual savings of Sh36,000, thereby enhancing financial stability. A monthly expenditure of Sh15,000 on groceries and shopping for an individual may be disproportionately high. Opting for a diet based on staple foods such as maize, beans, rice, and seasonal vegetables, along with sourcing supplies from open-air markets instead of supermarkets, can effectively reduce costs to meet a Sh7,000 budgetary target.
Read: I'm listed on CRB due to Sh235,000 mobile debts; how can I pay them off and survive on Sh36,000?
The proposed budget excludes discretionary spending such as entertainment, dining out, or leisure activities. Both of you are expected to fully commit to this adjusted lifestyle for the next several years to achieve shared long-term objectives. Reduce the clothing and grooming budget to Sh1,000 to Sh1,500 per month. Miscellaneous expenses should be strictly limited to urgent situations, with a firm monthly cap of Sh1,000 to Sh1,500. Additionally, have transparent and open discussions with your parents regarding the possibility of temporarily reducing family support to ensure mutual understanding of your current financial circumstances and future plans.
To effectively reduce total interest payments and accelerate debt clearance, prioritise repayment of the loan principal whenever additional funds are available. This can be accomplished by allocating any bonuses, dividends, or salary increases directly towards the loan, rather than increasing personal expenditure. Pursuing supplementary income through side ventures and directing all proceeds towards loan repayment can further expedite the process. It is also essential to verify, prior to signing any agreement, that the financial institution permits early repayments without penalty, thereby ensuring your efforts result in a shortened loan term and reduced financial obligations.
Rather than taking out a full Sh800,000 loan upfront, consider a more flexible approach that avoids accumulating interest on money you won’t need right away. For example, using your monthly income along with smaller, short-term loans could help you pay semester fees as they arise. Additionally, check if she qualifies for a HELB loan, since this could reduce the amount you need to borrow overall. Taking out a partial loan, such as Sh300,000 to cover just the first year, can also give you a chance to adjust your budget and reassess before committing to a much larger total repayment.
Understand that this loan remains entirely your legal responsibility even if your relationship status changes. For this reason, concerns have been raised by your friends. To safeguard your financial future, have an open discussion with your fiancée to ensure she comprehensively understands the limited lifestyle required to accommodate these repayments. Additionally, although it may seem unromantic, you should consider drafting a private agreement defining shared liability for the loan in the event of a separation. This approach can help protect against potential financial difficulties should circumstances change unexpectedly.
Develop and regularly review a comprehensive monthly budget. Create an emergency fund and allocate resources to cover essential expenses first and minimise discretionary spending. Maintain transparent communication with your fiancée regarding financial matters and shared expectations. Implementing these practices will help support your fiancée’s education and foster long-term financial stability as a couple. Effective financial management and collaboration are fundamental to achieving your collective goals. Vinnie
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I have Sh235,000 mobile debts; how do I pay them off and still survive with Sh36,000 salary?
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. I do not have any savings or investments. Please guide me. Gabriel
Muthoni Njakwe is an accountant and the author of personal finance book, A Woman’s Guide to Financial Freedom
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. 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. Find practical ways to cut non-essential costs. For example, food is your biggest expense at Sh15,000 per month. You can reduce by Sh8,000–10,000 per month by meal prepping at home, avoiding eating out, and buying in bulk. Opt for a cheaper haircut or extend the time between visits and reduce airtime expenditure to Sh500 per month. Redirect the money to debt repayment. You may also halt tithing for two months to free up Sh12,000, or cut contributions to Sh100 to free up an extra Sh1,200. This would be enough to pay off the Sh10,000 debt, and leave a surplus of Sh3,200.
Allocate the funds you have freed from expense cuts toward your debts. Not all debts are equal. 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. This approach 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 investment. 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.
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.
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