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What Your Budget ‘Should’ Look Like on a Ksh50K Salary (50/30/20 Rule)
What Your Budget ‘Should’ Look Like on a Ksh50K Salary (50/30/20 Rule)
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What Your Budget ‘Should’ Look Like on a Ksh50K Salary (50/30/20 Rule)

Eunniah Mbabazi
September 3, 2021

Having a budget is a great way to track your income and expenses. Once the money earned is broken down into what is spent and what is saved, it becomes much easier to ensure that what you make covers all you require.

A significant factor that has a massive impact on how well you live is housing. This aspect affects your budget dramatically. Depending on where you live, accommodation can be pretty expensive, and you may have to work a little extra to survive on your income or cheap enough to allow you to live comfortably within your means. 

Other important aspects that come into play regarding affordability are utilities, food and other goods and services.

It’s vital to understand the concepts of personal finance to live a healthy financial life. However, it is also helpful to work through an example with actual numbers. Keep in mind that this is just an example and should not be taken as a recommendation. Factors that are unique to you should be considered when creating a budget.

We shall take on a gross monthly salary of Ksh50,000 and see how budgeting looks like.

Taxes and Statutory Deductions

Every person should account for their taxes. It is required by law. Failure to do this may implicate you in tax evasion charges, and you may end up locked up for a while. If you are employed, the tax PAYE (Pay As You Earn), alongside NSSF and NHIF deductions will leave you with about 42,900. You can use the KRA PAYE calculator here for the specific amount you earn.  

Set Financial Goals: Savings

The point of budgeting, other than to be able to live within your means, is to build wealth. It’s very important that you prioritize this by regularly setting aside a portion of the income you get for financial goals.

This money could be put in your savings account, saving up for that dream home you want to buy, or that car you have always desired to have or even paying up your debts ahead of time.

It is recommended to save about 20% of your after-tax income. This is going by the 50:30:20 budgeting rule. 

This equates to Ksh8,580. If you cannot manage this amount, you can easily start lower then build with time. But it is good to keep pushing yourself.

In addition to this, keep in check any regular scheduled debt repayments you may have. Debts like HELB loans, depending on the amount agreed for regular monthly payments, should fall in that 20% of your income that is dedicated to savings. What’s left over can be saved.

The remaining amount is now Ksh34,320.  

Budgeting for Needs

The 50:30:20 budgeting rule dictates that 50% of your income after tax be spent on needs. These are the things you cannot live without.


Housing will, most likely, be your most significant need. It varies significantly depending on where you live, the type of home, whether you have roommates or live alone, etc.

For this example, we shall assume a housing expense equal to 30% of your after-tax income. This is a rule of thumb that is often recommended - but the lesser you can spend on housing, the better. This equates to Ksh12,870 for the month.

The amount remaining after housing is now Ksh21,450


The next thing in line is utilities. This includes needs like electricity, cooking gas and water. Some of these bills may already have been included in your housing expense, so no need to double count them.

And of course, this also will vary depending on whether you live alone or with many people.


This might include car fuel, public transportation fares, cabs/rideshares. Whatever moves you from point A to B. Again this’ll depend on where you live and how you’d prefer to move around. 


Minimizing take outs and opting to make your own food, could significantly reduce your monthly food budget. 

Following the 50:30:20 rule, on a Ksh50k budget, your needs should not exceed Ksh24,450. With rent costing you Ksh12,870, the rest of the needs need to fit within the remaining Ksh8,580.

Budgeting for Wants

The 50:30:20 budgeting rule dictates that only 30% of income after tax is spent on wants. This includes things such as clothes, shoes, entertainment, holidays, etc. 

At this point, you might be tempted to spend all this cash. But again, try as much as you can to get in the habit of regularly setting aside some cash for your financial goals, or even an emergency fund

Even if it requires starting small and building from there. You do not have to spend it all on unnecessary things. Save some more.

On a 50k salary, using this rule, you have about Ksh12,870 to use on discretionary purchases - maybe you can upgrade that wardrobe, get some new sneakers etc. 

Again, using this as a guide, you can see that on such a salary, you could be saving about Ksh9,000 every month which is about Ksh108,000 every year. After year one, this is good money to invest in many ways including starting a business, stocks, Saccos shares or even low-risk government securities. 

If you save even more, e.g. by taking more from the ‘wants’ kitty, you can build a strong base for investment. Try using this formula with the amount you earn and see how well it helps you visualise your future financial possibilities. 

Note that you have to account for your other regular obligations including to family, society and religion including tithes and place them accordingly in the three buckets of the rule.


A budget is a great personal financial tool, and every one created is unique to its creator. By going through the process of budgeting, you will get a better picture of how you can live, comfortably, within your means, and even inch closer to attaining your financial goals.

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Eunniah is an experienced business writer and editor. She is also a published author with two titles under her belt; Breaking Down and If My Bones Could Speak. You can find Eunniah on Twitter @Eunnyversal

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