I am 49 years old. I am divorced but I have one child. I have been jobless for the past one and a half years. Fortunately, I have recently got a job contract valid for one year only. I am starting in September and I will be making a net pay of Sh140,000 per month over this period. I don't pay rent since I live in a two-bedroom house that I built in my thirties. The house sits on a 40 by 80 plot in Kiambu County. My main expenses have been child support Sh9,000, food Sh400 per day, power and water Sh2,000 which I have been managing from hustling. I don't have any savings at the bank. Now that I will be 50 when this contract ends, I am wondering how do I budget and invest the money I make to be safe financially in case the contract is not renewed? In my 50s, how do I avoid falling into poverty? How do I plan for my retirement with these earnings? One of the things I have been considering is building a bank statement with this money to buy a newly imported van for executive car hire services within Nairobi areas. Is this a good idea? Please give me some advice. Anthony
Dominic Karanja, a financial planning and investments consultant.
Your essential monthly expenses are about Sh23,000: Sh9,000 for child support, Sh12,000 for food, and Sh2,000 for power and water. With net income of Sh140,000, roughly Sh117,000 remains before transport, clothing, medical costs, maintenance, communication, emergencies, and personal needs. Instead of assuming this entire balance is available for investment, set a realistic lifestyle budget of Sh50,000–60,000 and channel the surplus into savings, investments, and long-term security.
During the 12-month contract, assign your Sh140,000 net salary deliberately . One workable split is Sh40,000 for living expenses and child support, Sh30,000 for emergencies, Sh30,000 for retirement and long-term investments, Sh25,000 for future business or vehicle capital, and Sh15,000 for discretionary use. The amounts can change, but the principle is to stop temporary income from becoming permanent lifestyle inflation. In one year, this approach could build about Sh360,000 in emergency savings, Sh360,000 in retirement investments, and Sh300,000 in business capital, close to Sh1 million in assets while still retaining your house and land.
Before making major investments or buying a vehicle, first build a strong emergency fund. Given that you are approaching fifty, have a one-year contract, no savings, and a child to support, aim to cover at least 12 months of realistic personal expenses. Keep this money safe and accessible, preferably in a high-yield money market fund, so it is available for unemployment or unexpected needs rather than locked in a risky business or depreciating vehicle.
Do not rush to buy an imported van or to strengthen your bank statement. Executive car hire can succeed, but it also brings risks such as depreciation, insurance, maintenance, downtime, competition, accidents, driver issues, irregular income, loan pressure, and imported-vehicle compliance or mechanical problems. Judge the opportunity by net cash flow after all costs, including wages, fuel, insurance, servicing, repairs, tyres, cleaning, licensing, parking, downtime, loan repayments, and depreciation. Start the job first, save for three to six months, study the market, speak with operators, identify potential clients, and calculate realistic profit. You can also assess demand through an existing vehicle owner or transport company before using your savings.
A vehicle should not be treated as a retirement plan, especially at 50, when retirement capital needs protection and diversification. Build long-term security through a balanced asset base: protect your house and land rather than pledging them for an untested venture, maintain accessible emergency savings, grow dedicated retirement investments, pursue profitable business assets, and add income-generating investments that reduce reliance on employment.
At 49, you may have 10 to 15 years to reduce dependence on employment income, so retirement planning should begin immediately. Use the next decade to convert salary into lasting security through disciplined saving and investing.
For example, saving Sh30,000 per month for 10 years gives Sh3.6 million in contributions before returns; increasing this later to Sh50,000 per month would raise contributions to Sh6 million. Retirement success is built less on one exceptional investment and more on consistent saving over time.
A practical 10-year plan can be divided into three stages. From 49 to 50, use the contract year to stabilise your finances by building an emergency fund, avoiding unnecessary debt, starting retirement savings, controlling lifestyle inflation, exploring viable businesses, getting medical insurance, and protecting your assets.
From 50 to 55, if the contract is not renewed, aim to have 12 months of emergency savings, retirement investments, a tested business option, secure home ownership, and no costly consumer debt. This may also be the right time to consider executive transport if the numbers are sound, while pursuing consultancy, training, part-time, or contract income. From 55 to 60, consolidate your position and reduce dependence on any single employer, business, vehicle, or income source.
In summary, avoid buying a van simply because your income has increased. Build financial security first through an emergency fund and consistent retirement savings. Preserve your low cost of living and the advantage of owning your home.
By your mid-fifties, your goal should be strong emergency savings, retirement investments, and at least one reliable income stream. You are not starting from zero; the main risk is allowing this opportunity to be consumed by higher spending instead of turning it into long-term security.
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.
