I am a health worker making Sh45,000 monthly. I have been depending on my salary for the past six months after losing my husband. My expenses have been Sh18,000 rent, Sh8,000 house-help, Sh3,000 parents, Sh4,000 diapers for my one-year-old twins, Sh2,500 for water and power, Sh15,000 groceries and shopping, Sh1,000 Wifi, Sh4,000 parents, between Sh5,000 and Sh10,000 fare and fuel.
I was fully dependent on my late husband and budgeting on my own is very difficult. I have been topping up the deficit from my late hubby’s account which has savings of Sh450,000. I am to receive a lump sum policy payout that he had taken of Sh4.5 million in January, but I’ve never been an entrepreneur. What should I do with the money?
Rhina Namsia, the founder and Chief Executive Officer of The Acemt Consulting, a training and consultation company
First, take a pause. Don’t rush into decision making. A large payout can attract pressure from family, friends, or your own emotions. Avoid any major purchases, new commitments, and even business investments. Secondly, evaluate your budget. Your current monthly expenses come to around Sh63,000 against a salary of Sh45,000. This creates a gap of about Sh18,000 every month.
To ease the pressure, make your salary the engine of your monthly life and keep the lump sum strictly for long-term planning. A realistic target budget for now could look like this. Rent Sh18,000 (look to negotiate or move later if needed), Househelp Sh4,000 (move to part-time or work less hours), Parents Sh4,000, Diapers Sh4,000 (use bulk buying, cheaper brands without compromising hygiene), Utilities Sh2,500, Groceries Sh7,000, Wifi Sh1,000, Transport Sh4,500, Total: Sh45,000.This budget may feel tight at first, but is temporary.
Protect the Sh450,000 savings and make it your emergency fund. Put it in a secure, easily accessible place such as a money market fund so that you don’t have to borrow or touch your husband’s larger payout in emergencies.
Prepare emotionally and logistically for the Sh4.5m payout. Before January, make sure you have the correct documents for the payout, an updated bank account under your control, clarity on taxes and payout timelines, and a trusted financial adviser or lawyer (even just for an hour of consultation). This reduces confusion when the money arrives. Think of the payout not as money to spend but as money to organise. Break it down into clear categories that take care of your present, your future, and your children. A safe and practical allocation could be as follows.
a) Emergency and short-term needs, Sh600,000. Add this to your existing Sh450,000 so you have a full year of living expenses saved. This gives you peace of mind as the sole breadwinner. Keep this in an MMF.
b) Education fund for the twins, Sh1m. Place this in an education fund account or a conservative investment account specifically labelled “Children’s Education.” Set up a simple trust or restricted bank account for children’s school fees so money is used as intended.
c) Income-generating investments or a small business, Sh1m. Use this as seed capital to build a small income stream or to buy an asset. Start small, test an idea first, and only scale once you see consistent profit. Choose a business that matches your lifestyle as a working mother such as a small home-based snack or baking business, a small kiosk,or even a poultry project. The aim is to add Sh10,000 to Sh25,000 per month to your income, not to create pressure.
d) Low-risk investments, Sh1,5m. Diversify into medium-term fixed income like government papers, bank term deposits, or a money market fund. This preserves your capital while giving you steady returns.
e) Set aside Sh400,000 as a personal cushion for reasonable one-off items such as home needs, essential furniture and transport and use it sparingly. The idea is to protect capital, create income, and keep growing.
Next, put structures around the money. Money without structure disappears fast. Open three accounts: One for living expenses (salary only), another for emergency savings and another for investments and long-term wealth building. Do this by automating standing orders for savings and investments, keeping a simple notebook or phone app for tracking expenses, avoid giving out loans from your payout, and avoid being pressured into joint family investments. Your priority is your children’s future and your own stability.
Use part of the payout to create or update your will, appoint a guardian you trust, and set up a small trust or restricted account for the twins’ education and welfare. This gives you peace of mind and protects them if anything happens.
You mentioned you are not good with budgeting. Many people aren’t. You’ve had to adjust to a new life very suddenly, but financial skills can be learned, so start small by writing down every expense for 30 days, reviewing your budget monthly, join a women’s financial literacy group, and ask for help whenever you feel stuck. You don’t need to be perfect, you just need progress.
The most important thing is that you are not starting from zero. You have a stable job, Sh450,000 in existing savings, a Sh4.5 million payout on the way, two children who will motivate you every day, and the desire to rebuild your future. That already places you in a stronger position than many.
With calm planning and steady steps, you can create a financially secure life where you never have to depend on anyone again. Your husband’s savings and insurance were meant to protect you in moments like this and with careful planning, they will. Take your time, guard your peace, and make every shilling work for your children’s tomorrow.
