It is a fact salary will never be enough. To confirm this, there are thousands of Kenyans earning a 6-figure salary in the country but have lots of financial challenges. Hence, the trick is to work with what you have. Here are some tips on how to survive with a 50K salary in Kenya.
50,000 shillings in Kenya is almost the median income most people earn. With good planning, it is possible to work with this salary and even enhance it further.
These tips are some of the most common, employ at least 3 of them, and surviving with a 50k salary will become possible and easier.
How to survive with a 50K salary in Kenya
1. Work with a budget
Budgeting is the primary tip to financial success irrespective of your income. You should balance your expenses with your income to avoid misuse and getting into unplanned debts.
Some of the key items your need to plan for include the rent, food, entertainment, and savings. When doing this, start with the most important items such as food.
A budget acts like a plan that keeps you in check. When you have a plan, you will shy from misuse helping you to remain within the limit of your income.
One of the most common budgeting formulas is the 50:30:20 rule. This means that you should spend not more than 50% of your income on needs such as food, clothing, and rent. The rest 30% should go to wants such as entertainment.
Finally, at least 20% of your income should go towards savings. In this case, ensure to save at least 10,000 shillings every month.
Investment is the key to growing your income. As you grow, so will the need for more money. Hence, it is vital to start investing as early as possible.
There are various available investment options that you can do. However, settling on the right one requires evaluating various factors such as capital requirements, risk levels, and skills.
As a starter, focus to target those investments with low-risk levels and require less capital and then expand from there. Some of these include options such as investing in saccos and government bonds.
With these, you benefit from regular dividend and interest payments. Although at the start you will not get as much income, consistent compounding helps to grow your portfolio over time. That is why it is important to start as early as possible.
This is a prove that you don’t need a huge capital outlay to start investing as long as you start with what you have and focus to expand.
As an example, with a minimum savings of 10K per month, you will have 120k savings in a year. If you put that in a Sacco with a return of 10% per year, you will get a return of 12K. Here is a list of the Top 20 best dividend-paying saccos in Kenya. By the end of the year, you will have 12K more than the person who decided to idly save money without investing.
3. Reduce your debts
Debt reduction Is a key strategy if you want to achieve financial success. This can also be referred to as living within your means.
Debt overuse or debt for consumption is an indicator of poor financial planning. Big debt accumulation will make it harder to survive with a 50k salary in Kenya. Hence, you should only take debt when necessary and ensure to pay it back as fast as possible.
This helps to reduce the debt costs such as interest payments ensuring you have more income for your use.
If you have to get into debt, focus to get the best terms possible. Avoid expensive shylocks and instead, go for saccos and mainstream banks. A list of all regulated banks in Kenya.
4. Grow your skills
Skills growth is a key way to expand your income. Currently, there are many opportunities that you can use to grow your skills. Some of these include;
- Advancing your education
- Taking short courses
- On job learning
Growing your skills will result to better pay as you progress in your trade. An increase in your income comes with more financial flexibility and freedom.
Hence, use part of your current 50K income to advance your skills. It will result in improved earning in the future.
5. Buying in bulk
Shopping in bulk ensures you get items at a cheaper price. This is a key approach if you want to minimize your costs but still get the same products.
You should also take advantage of the regular discounts offered by sellers to stock up. Some of the items that qualify for this strategy include household items and groceries.
Instead of buying 1 kg of rice, target to buy 5kgs as they will come cheaper.
Below is the breakdown of tips on how to survive with a 50K salary in Kenya.
- Work with a budget
- Reduce your debts
- Grow your skills
- Buying in bulk