A Note To The Youth (And late bloomers)
I was 21 years old the first time I ever earned a salary. This was in 2006 when I was in my second undergraduate year at The University of Nairobi, during one of the long semester breaks. I was lucky to secure a one-month internship and even more lucky to find a generous employer. My wages amounted to Ksh 1,500 a day and at the end of that month, I had a cool Ksh 30k to my name. The salary could not have been more timely as we were just getting into the Christmas festivities.
The afternoon I received my cash, I took a number 9 bus to Eastleigh upon the advice of a friend who grew up there. After getting spewed out of the chaotic bus into a more chaotic crowd, I pushed my way into Garissa Lodge Shopping Mall. Throngs of people were forcefully trying to fit in narrow hallways, the scene not any different from cows pushing each other to get into a cattle dip. The place smelled of determination. Once inside, I shopped for my entire family. A brown skirt suit for my mum, a floral shirt for my dad, Savco jeans for my older brother, a lacy dress for my sister and Timberland boots for my younger brother. I only left when my wallet was depleted of cash. It did not occur to me to keep some cash aside for a rainy day.
Two years later, at the age of 23, I got into formal employment. The day was August, 2008 on a Monday, right after siting my very last fourth year exam on Friday. I had almost turned down that job after what I imagined to be an insulting offer.
“We are happy to offer you the job of a Debt Collections Analyst.” Read the letter. “You will be under probation for six months earning a gross monthly salary of Ksh 15,000.”
I was livid!
What exactly did they imagine I would do with 15k? Did they know I had earned twice as much two years before on a mere internship?
However, my then boyfriend (now the mister) who was seven years older than me and working for a bank as a clerk asked me to look at the bigger picture.
“At the very least, you got a permanent job even before you shipped your stuff out of your campus hostel. You will never know what it feels like to tarmac.” Tarmacking was a popular phrase back in my days. It described the art of walking from office to office to drop one’s CV in pursuit of employment after undergraduate studies.
I listened to him.
Immediately I signed the contract, I spoke to my cousin and asked to move in with her and help out with half her rent. She lived in a servant’s quarter (SQ) in Hazina Estate, South B where she paid a monthly rent of Ksh 9,000, so I offered to take care of Ksh 4,500. That was a whopping 30% of my salary! The remainder was spent on bus fare, upkeep, entertainment and clothes shopping. My cousin and I loved dressing up in formal wear and we knew all the thrift shops that understood our need for standing out. From Sunbeam to Gikomba, we were well covered.
I loved living in South B but I hated the traffic on Mombasa Road, which meant I had to leave the house before 6.00am to get to the office in Westlands by 8.00am. After my six months probation, my salary doubled to Ksh 30,000. Immediately, I went on a hunt for an SQ in Westlands and its environs. And when I landed on one going for Ksh 15,000 a month, I did not think twice. For the next 1 year, 50% of my gross salary went towards paying my rent. The other 50% took care of the usual. Bus fare, upkeep, entertainment, and lots of clothes shopping.
Towards the end of 2010, two things happened. First, my salary was adjusted to Ksh 50,000 and secondly, I was feeling rather complacent and needed to change ship. I decided to sign up for a professional course which would be the stepping stone to the new field I sought. Unfortunately, it turned out that I needed Ksh 100,000 to sit the first exam, money that I did not have. As you have clearly established by now, the word saving was alien to me.
I spoke to a wealthy uncle who gave me Ksh 50,000 but still, I couldn’t bridge the remaining gap.
One afternoon, while having chips and fried beef for lunch at a nearby cafeteria, I lamented to a colleague about my struggles. I was really just lamenting and not expecting any support other than her ear which she had adequately lent me. But over and above that, she offered to give me the Ksh 50k which she asked that I pay back in four instalments. I was in shock!
This girl was the last person you would ever have imagined to have any money, leave alone Ksh 50,000. She was soft-spoken, mostly carried lunch to work and was one of those people you would consider irrelevant. But she had 50k to spare! I was taken aback and my shock was rather obvious.
“Why are you surprised?” She inquired. “Is it because I can trust you to lend you this much, or are you surprised that I have the money?”
“The latter.” I said.
She informed me that since she started working, she had diligently saved 20% of her monthly salary and ensured that she would only live within the means that the remainder could afford her. I did a quick calculation and that meant that when I earned 15k, I should have saved at least 3k. But if that would have meant not rocking my peplum tops and pencil skirts, wacha ikae!
On a serious note though, I worked out how much I would have saved by then, and with as little as 10% savings per month, I would have had exactly Ksh 100,000 in a period of slightly over two years, enough to pay for my exam then.
That was my moment of reckoning.
I immediately resolved to having a budget that I try my best to stick to. The expenses might sometimes override the budget, but I don’t mess around with my savings. Just like what goes to the taxman, I ensure my savings are out of my reach. My biggest accomplishment in so far as my savings go is when I finally decided to take a mortgage a few years ago and my savings covered 10% of the cost of the house.
As I was writing this, it occurred to me that probably the reason I took too long to start saving was because it was not reinforced on me as a child. I think saving is an attitude that should be enforced at a very young age with the same zeal as values such as honesty and respecting the elderly. For that reason, I will introduce the concept of saving to my six-year-old daughter Xena and based on my experience, hopefully run a feature about how to get kids saving from as early as the toddler phase.
If you don’t remember anything from my narrative, even the fact that I love fancy clothes, please remember why you need to start saving from an early age, even when you feel like your earnings are meagre and cannot meet your basic needs. Because trust me, money will never be enough, so you need to cultivate the discipline early. Look at our politicians almost grabbing the entire country when you think they’ve had enough!
Create short-term and long-term goals and start saving towards them. Set up a standing order that routes a certain amount of money to a savings account that you can’t access easily. Or even better, open a money market account with asset management companies. Money market funds pay a notch higher interest than your bank would pay for your savings, and you can always conveniently wire the money to most funds through Mpesa. You never know when you will need to upgrade your education, go on a trip to a remote island, buy a house or even quit your job and have something to live on before you figure things out! So save, save, save!
Just to put things into perspective, had I saved the entire Ksh 30,000 I made from my internship in 2006, it would now have been worth over Ksh 130,000, 13 years later!