My name is Annalise. I am working as a secondary school teacher in Machakos County earning Sh21,000 due to loan deductions and expenses.
I have a cyber café but the earnings are not much. I average between Sh800 and Sh1,000 per day. However, at the end of the month, I am unable to track where the cash goes and I don’t know whether I am making any profits after paying rent, buying accessories and paying the employee.
I am addicted to debt, particularly hire purchase items, and I don't know how to get out of it. One year ago, I lost a pickup vehicle that I had bought on hire purchase terms to start a cargo transport business within Machakos town after failing to make the required monthly instalments.
I currently have an electric sewing machine I acquired on hire purchase for my mum at Sh48,000. I have paid off Sh16,000 in two instalments of Sh8,000 each. I had savings of Sh250,000 that I had invested in a market fund that has since collapsed. Now I have nothing to show for all the work I have done in 10 years.
For my house, I pay Sh10,000 in rent, which is inclusive of water and electricity. I also pay an average of Sh15,000 per term for my son who is in Grade Four. Please help me.
Gertrude Njeri is an accountant, personal finance and investment consultant. She works as a community manager for an investment company based in Nairobi
First of all, thank you for sharing your story. It takes a lot of courage, and shows that you’re ready to turn things around. You've been through a lot—between the lost pickup, hire purchases, the collapsed investment, and daily money stress—but don’t lose hope. Although you have incurred a few major financial losses, you can still turn things around. Let’s walk through a few steps together. You don’t have to fix everything overnight. The goal is to take back control, one decision at a time.
From your breakdown, you are currently earning Sh21,000 from teaching (after deductions) and about Sh800–1,000 per day from the cyber café, which translates to around Sh27,000 per month. This gives you a total of Sh48,000 per month. The issue here is not your income, the issue is that the money you are making is not being properly tracked, and some financial and spending habits that you have become accustomed to are draining it fast. Where is your money going?
Let’s break your expenses into two parts: Personal life and business. A breakdown of your personal expenses produces the following expenditure: House rent (inclusive) – Sh10,000, son’s school fees – Sh15,000 per term (Sh5,000 per month), sewing machine hire purchase – Sh8,000 per month, food, transport, other expenses – Probably around Sh10,000–Sh15,000.
Although you have a rough estimate of how much your business is making, you cannot tell if it is returning a profit or losses. You have no idea if it has broken even, whether it is self-reliant or not. You need to adopt proper bookkeeping and start tracking where every coin made by the business goes.
You can start by noting down all your daily revenue (for example, from revenue generated from photocopying, typing, printing, and browsing services). Next, write all expenses the business incurs (from stock such as Wi-Fi, papers and toners, staff, and rent). At the end of every week, analyse your figures to see whether you made a profit or not.
You can use a small notebook, spreadsheet, or even a free app like Money Manager or Moolah. Since you run your business as a side hustle, this will be highly dependent on your employees’ fidelity to the business.
It is also important that you evaluate your operating hours. For example, does the business open on Saturdays and Sundays? At what time does the business close? Since you most likely work 8am to 5pm from Monday to Friday, you can evaluate the possibility of extending your working hours (for example if the business closes at 6pm, you can take over after school and close at 8pm) or opening days (for example, you can be open on Sunday afternoons).
Once your customers become accustomed to the extended operating hours, you will steadily notice an increase in the amount of work. As you stabilise, you may also want to consider scaling the type of goods and services you offer. For example, you can hive off one corner and start offering mobile services such as money transfer or selling mobile handsets and computer accessories such as keyboards, mice and tablets.
The allure of hire purchase is understandable. After all, you get what you want in advance, and only get to make small payments over time. However, this is usually a more expensive route. It is more expensive than the traditional bank or Sacco financing. The terms and conditions are not always favourable, and the small print may be written in such a way that the seller reserves the right to recover any item sold on the very first day that you default on your payments, unlike bank or Sacco financing where your case can be heard and restructured, sometimes without even incurring additional penalties.
It is likely that the small print was the reason you lost your pickup truck. When it comes to money, the best principal is to earn or learn. Let that loss be your learning moment. Do not sign any more hire purchase agreements, no matter how tempting. You cannot afford them. Have a candid discussion with your mum regarding the repayments for the sewing machine you acquired for her. Assuming that this machine was acquired for an economic activity, discuss whether she can contribute at least Sh50 to Sh100 per day towards the repayments.
Start a simple monthly budget. Review your current monthly budget to start taking back control of your earnings and spending. For example, you can follow this breakdown: House rent (inclusive) Sh10,000, School fees Sh5,000, Hire purchase repayment Sh8,000, Food and household Sh10,000, Transport and other costs Sh5,000, Savings Sh5,000. This will amount to a total of Sh43,000, which will give you a breathing space of at least Sh5,000 based on your current combined income from the business and formal salary.
Nurture new financial habits. Understand that turning your financial lifestyle around will not occur in a day. It is the small steps such as tracking your personal and business money every day that will accumulate and start returning the results you are seeking.
You need to start saving again. Nowadays, you can start saving in money market funds from the comfort of your mobile phone. This means you can start saving as little as Sh100. You need to avoid making emotional purchases, especially on things that look like investments, but which really aren’t.
I would urge you to start using the seven-day rule to check whether you need to buy the item. This rule requires that once you identify something you badly want to buy, you should take a seven-day break before closing the purchase. After seven days, evaluate if you really need to make the buy. If you feel overwhelmed, find an accountability mentor who can walk with you and provide financial advice before you commit to any future investments.
You have mentioned that you lost money in an investment fund. That is regrettable. When making future large investments, I would urge you to involve a qualified and professional investment advisor who can spot pitfalls in the market. Avoid putting your funds in investment schemes that promise absurdly high yields that cannot be supported by the market – especially schemes that are not regulated by the Capital Markets Authority or the Central Bank of Kenya.
If you have any money problems, send us an email at [email protected] and leave your number for contact. Money questions will be answered on this column.
