I have nothing to show for my monthly Sh50,000 pay

To be sincere, I am overwhelmed because I have never had so much money in my life. PHOTO| FILE

What you need to know:

  • I want you to take some time to write some broad goals about your future. Visualise where you want to see yourself in the next five years and use your income to make that vision a reality.
  • You could invest in your skills to grow your career. Pay for a professional course, upgrade your academic qualifications, pay for a financial management course: the options are endless.
  • Get yourself a medical insurance, and if your employer has one, enhance it.

Q I am 23. I got my first real job three months ago. The job pays Sh50, 000. To be sincere, I am overwhelmed because I have never had so much money in my life. So far, I have nothing to show for it. I blow it all on clothes and nights out with friends. Please tell me how I can wisely invest my salary every month.

 

Three months was your probation period, so you are reaching out at the right time. Excessive partying with your buddies should stop now.

Buying clothes you do not need is equally destructive as you will soon have to give them away to create room for new ones, so stop the habit before it ruins you.

You haven’t said anything about paying rent and buying food, so most likely you still live with your parents or guardian. I suspect you have not let them know you are on a good salary, otherwise they would have given you some good insights on how to prudently use your salary.

I want you to take some time to write some broad goals about your future. Visualise where you want to see yourself in the next five years and use your income to make that vision a reality. You could invest in your skills to grow your career. Pay for a professional course, upgrade your academic qualifications, pay for a financial management course: the options are endless. Get yourself a medical insurance, and if your employer has one, enhance it. If you get hospitalised today, I can assure you that your drinking buddies will just pass by and say ‘pole sana’, leaving the financial burden to your family. Protect yourself when you can. Set investment goals and target to save at least 20 per cent of your salary for future use. Keep this in a restricted account where you cannot withdraw it whenever you need some small money.

These savings should enable you buy assets that will create wealth for you. Join an investment club and evaluate different investment options - 23 may seem too young to think about pension, but it is a suitable age to start securing your retirement. You could also think of helping a needy person and see how that makes you feel.

Bottom line, look for a financial or investment advisor, or get suitable training that will teach you how to invest wisely and make your money work for you. Stop planning for Saturday night, instead, start planning for financial freedom for yourself and generations to come.

If there is a parent reading this, this is a wakeup call. If you are not teaching your children how to manage their money, they will spend it the best way they know.