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The Best Way to Afford Making Big Purchases in Your 20s 
The Best Way to Afford Making Big Purchases in Your 20s 
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The Best Way to Afford Making Big Purchases in Your 20s 

Washika Shiundu
September 26, 2022

There is no denying that affording big purchases in your 20s can be an uphill task. You want to get the best comforts possible such as good quality furniture, appliances such as fridges, entertainment units and so on. 

But you also do not want to compromise on the more important financial goals such as planning for your future

So how can you afford that vacation or living room makeover you’ve always dreamt of without breaking the bank? 

Don’t worry. This post details six ways to afford big purchases in your 20s. You’ll learn how to acquire the purchases seamlessly.

1. Plan Ahead

“Plan your work and work your plan” Napoleon Hill

All big ticket items need major planning. This means doing your research ahead of time and knowing what you want and need. 

Here’s how you can plan for your next big purchase

  1. Create a budget so that you don’t overspend.
  2. Compare features and deals to find the right price.
  3. Consult with experts to help you get the best possible deal.
  4. Decide how you’ll pay e.g in cash, hire purchase etc
  5. Read the fine print before making your purchase.

Also read: Money Mastery: How to Set & Actually Achieve Your Financial Goals.

2. Save For the Purchase in Advance

If you know you want to buy a new piece of furniture or kitchen appliance, start setting aside money each month to reach your goal. You may have to make some sacrifices along the way, but it will be worth it.

When you pay in cash, it means you’re not spending money you don’t have. As such, you won’t suffer from the financial stress that can accompany carrying debt.

Here’s how you can save for big purchases:

  • Set aside money each month in your budget. By doing this, you will have a specific amount of money saved up over time that you can use towards your purchase. 
  • Look into ways to earn extra money to put towards your savings. This can include things like picking up extra shifts at work, selling unwanted items, or taking on side jobs. 

So, where do you keep your savings? When saving for a big-ticket purchase, you can keep your savings in a fixed deposit account or a money market fund. Both allow you to earn interest on your savings.

If you have trouble saving money, try setting a goal and working towards it. Start by saving at least 10% of your monthly income and then increase it to 20% or even higher as you become more accustomed to saving. 

Alternatively, you can also automate your savings. This way, that responsibility will no longer be on you. As such you’re likely to meet your saving goals.

Also read: 11 Ways to Save Money Without Driving Yourself Crazy

3. Join a Chama

Although chamas have been stereotypically associated with women, anyone can form and join a chama. You can form one with your colleagues, friends, family and so on. The critical thing is to have a common interest. 

You can use chamas to save money for your big purchase. What’s more pleasing is that some chamas work as merry-go-rounds where each member contributes towards a revolving purchase of household items. This can be an easy way to get that kitchen appliance or entertainment unit you’ve longed for without ever getting into debt. 

Read Also: 7 Good Reasons to Join a Chama 

However, before you join a chama, keep these in mind:

  • Know your savings circle: If possible, make sure you know each member of the chama. Otherwise, you might lose your hard-earned cash to fraudsters. Chama fraud is a common occurrence.
  • Write down rules: Chamas must have a governance structure. For instance, the chama you join needs a constitution that spells out how much you need to contribute each month, loan limits, interest rates, and more. 
  • Register the chama: To safeguard your savings, you’ll need to register a savings account. Chama savings accounts have more than one signatory. It means there’s a reduced risk that the treasurer can swindle you.

Learn More: Chama Revolution: What Successful Chamas Know and Do, Why Many Fail.

4.  Take a Loan

So you've finally decided it's time to save for that vacation. Congrats! It's an exciting milestone in your life. But between rent, groceries, and utilities, how are you going to afford this trip? 

One option is to take out a loan. This can seem daunting, but it's important to remember that many types of loans exist and have different interest rates and terms. Do some research and find the loan that's best for you. 

Some loan options include:

Personal Loans

Personal loans can be a cost-effective way of acquiring big-ticket purchases if you are so inclined. However, with many financial institutions and banks offering personal loans, it can be challenging to tell the right one. Luckily, you can use Money254 to search and compare the top available personal loans in Kenya. 


Savings and credit cooperatives (SACCOs) loans can help you afford the big-ticket purchase you desire. Most SACCOs offer loans up to 3 times the amount you’ve saved. For example, if your yearly savings is Ksh150,000, you’ll be eligible for a Ksh 450,000 loan.

However, you need guarantors whose savings make up the difference between your loan and your savings.

Read Also: Saccos in Kenya: To Join or Not

Microfinance Loans (MFL)

If you have little savings in your bank, it can be challenging to get a loan. This is when microfinance institutions come in. 

Microfinance institutions offer small loans (micro) to individuals who cannot get conventional loans from the bank. As with other loans, ensure you compare their interest rates and eligibility criteria.

Examples of microfinance institutions in Kenya include:

  • Kenya Women Finance Trust (KWFT)
  • Faulu Microfinance
  • Choice Microfinance Bank Limited
  • Uwezo Microfinance Bank
  • Rafiki Microfinance

Also read: Types of Personal Loans In Kenya

5. Hire Purchase (Lipa mdogo mdogo)

Hire purchase (HP)  can help you afford big-ticket items by making smaller payments over time. It's a loan, with the item you're buying as collateral. This can be ideal if you're not quite ready to pay for something outright but want to avoid having to pay interest on a loan. 

You can also spread the cost of your purchase over several months or years, making it more manageable.  No wonder the  “lipa mdogo mdogo” phrase.

However,  you'll need to be approved for a HP agreement, and there may be restrictions on what you can buy. So, read the terms and conditions thoroughly before signing anything. You don’t want to be fleeced of your hard-earned cash in the form of hidden costs and charges.

Examples of traders that accept hire purchases include, Synergy Industrial Credit Limited, One Africa Capital Ltd, and Kenya Credit Traders.

6. Keep an Eye Out for Sales and Discounts

Sales and discounts are a great way to save money on big purchases. They allow you to buy items that you may not be able to afford otherwise. 

For example, if you want to buy a new TV, you can wait for a sale or use a discount coupon to get a lower price. A good time to check if an item has dropped its price is during holidays and Black Fridays. In Kenya and around the world, the next big sale will take place on 25th November 2022.

In addition,  take advantage of bonus and reward programs. They can also help you save. Finally, don't be afraid to negotiate. If you're willing to haggle, you can often get a better price.

Wrapping It Up

By following some of these tips and more, you can make your dream purchase a reality. The key thing is to plan how you can afford these items and start saving. You can also take a loan or apply for a hire purchase. 

If you go for the loan option, make sure you understand the cost implication and ask yourself why you cannot wait to afford to pay in cash. 

Hire purchase programmes also come with a cost, while the ‘lipa mdogo mdogo’ option in some retailers allows you to pay in installments before taking the item home at no interest. 

Washika is a seasoned SEO content writer and copywriter with proven experience in creating unique, insightful and engaging content for a wide range of audiences that ranks high on search engines. Learn more about his work by visiting his LinkedIn profile.

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