EDITOR’S NOTE: This article is part of our Money254 Partner Series produced in partnership with Absa Bank Kenya to celebrate the launch of their new digital savings account. For more on Absa’s new digital savings account, read here.
I thought I had my finances in order, only to realise three months into my marriage that I had to do things differently. Albert Einstein once said that you cannot solve problems with the same level of thinking that created them. I had to elevate my thinking and, more so, my habits when it came to money management.
But how did I get here? On Valentine’s Day, February 14, 2023, I got married to a very beautiful girl, Noni. Today, I will not delve into how we met. Otherwise, this article might turn into a love letter. She is from Thika. Before we got married, she was operating a cosmetics shop in Rongai.
Meanwhile, I lived in Roysambu in a small but cozy bedsitter. Managing my expenses was relatively easy since I am a frugal person. My frugality allowed me to have a few thousands left in my bank account at the end of the month, and I would consider that my savings, which would then cover my chama deposits, and some I deposited in my Sacco.
In January this year, as we made plans for moving in together, we set out New Year's resolutions together. We decided we were going to move into a bigger space, a one-bedroom house. The second major goal was to save money to raise capital for Noni to open a second cosmetics shop in Roysambu. We figured we would need Ksh300,000 for all this, but did not break down how much each goal would consume.
I remember the day I moved from the bedsitter to the one-bedroom house. She was not around that day. She was to join me in our new house later. What really stuck with me was the echo in the house.
Previously, my bedsitter was packed with a bed, a two-seater sofa, a coffee table, and my study desk. With these few pieces of furniture, the new house felt like a hallway. My wife had a similar set of furniture, which she later moved in with. This helped a little with the emptiness of the house, but now the house looked like chaos. The furniture was not matching. It was ridiculous.
However, we were never bothered that much. We were in love. We had a bigger goal of setting a solid financial foundation as we were planning on expanding the family soon. This needed us to prioritise raising capital for Noni’s second shop.
So fast forward to June, the middle of the year, and a perfect time to reassess the New Year's resolutions. We had achieved two things: we had moved in together, and we lived in a one-bedroom house. My wife’s earnings had been disrupted after moving from Thika to Roysambu, she was spending less time on the shop, and more money commuting to the business. However, what was unsettling is that we had made very little progress in raising capital for the second shop.
What we had not foreseen was that the move to a bigger house meant more expenses, beyond the rent. The one-bedroom houses near where my bedsitter was were much more expensive and I had to move further away from the road to get a one-bedroom that I felt was more affordable albeit more expensive than the bedsitter.
This meant that my daily transport to work had also increased by Ksh100 - Ksh50 for each boda boda ride. Of course with two people now staying in the house, and regular visitors to the newest couple, my routine bills such as electricity, water, and foodstuffs, had increased drastically.
The few thousands that would remain in my salary account were no longer there. In fact, I had to make ends meet, especially the last week of the month. I even struggled to pay my chama deposits.
This is when I knew something needed to change. I started reading financial articles and watching financial experts on YouTube, looking for answers. We did so together as a mid-year resolution.
We learned three things that we started implementing.
Initially, as a bachelor, I only had my needs to take care of. I had my budget in my head, which I would manage without a problem. Now I have a partner, and we both had needs. Managing all that in my head was no longer viable.
We learned that a budget helps you foresee your spending before the money comes in. It removes impulsivity and helps you prioritise expenditure.
We, therefore, drew up our budget, and my frugality wanted to take over, but we found a balance. One of the changes we made to switch to bulk shopping and shopping for groceries directly from the market, we found it significantly cheaper. Nowadays, the trip to Githurai to shop for food, where it is much cheaper, is a Saturday routine.
At the beginning of the year, we had resolutions, but we had yet to concretise them as goals. We had no timeline for achieving these goals, and we didn’t have a definite figure we were aiming at. We just knew we needed to save enough for her to jump start her business.
We learned that it is important to have concrete goals. You should have them down to an amount and a timeline.
Therefore, we sat down together and listed everything we needed to buy to stock up the business fully. Let me tell you, Maina - the summation figure at the end knocked me off my chair.
This opened our eyes, and we knew the mountain we had to conquer, Ksh200,000.
We, therefore, set another mid-year resolution where we would leverage e-commerce to advertise online and raise awareness on some of the products available at Noni’s physical shop.
All these were amazing lessons that started transforming how we made and used money. However, the best lesson of them all was to separate my savings account from my salary account.
Separating these two accounts helped me to better manage my finances and keep track of our goals. In my research, I settled on opening the Absa Digital Savings Account. The Absa Digital Savings Account was very convenient and functional for me.
To start with, I did not need to go to any physical branch to open it. I just opened it from the comfort of our house. Part of the reason I operated with one account before is because I figured it was too much work to have a second account. I remembered all the standing in line, signing forms, and photocopying others. It was just hectic. But the Absa Digital Savings Account addressed all that.
Furthermore, the money transfer into the account is stress-free. I set up a standing order that automatically deducts Ksh15,000 a third of my net salary to the Absa Digital Savings Account.
This happens on the 1st of every month, and I do not have to remember it. My wife regularly tops with manual deposits. While the account is in my name, we have a shared goal to plan for our young family’s future.
Monitoring how the savings account is growing is my new exciting thing. The account is well-suited for goal-oriented savings. In addition, my savings earn interest. Yes, at an above-inflation rate of 9% per annum - which happens to be the highest offered by a commercial bank in Kenya.
The interest also accrues daily and is paid out monthly. Hence, I literally get to see my money grow. Not to mention the compounding effect since even the interest earned this month earns interest for the following month.
But what gave me even more peace was that in case of an emergency, I can access the money instantly, unlike the Chama and the Saccos. This is without incurring a withdrawal penalty or fee.
Once we had our mid-year resolutions in place, we went to work, and since July, we have been gaining significant mileage on our goals. We have cut short on unplanned household purchases and we are on course to expanding the business as soon as we hit our target, hopefully by March next year.
And as we sat earlier in October to assess our progress, we couldn’t help but be proud of ourselves for the turnaround we made. We cannot wait to see what we will have accomplished by the end of the year.
I hope my journey with Noni has inspired you to relook at your New Year's resolutions and figure out what you can achieve in the remaining months, it’s never too late.