Help, I'm paid Sh60,000 but I'm in a constant cycle of mobile phone loans

Contributor

Nation Media Group

My name is Peter. I'm 30 and earn a gross salary of Sh59,500. I try to live within my means. My net salary after statutory deductions of Sh13,726 and loan deductions of Sh5,834 and Sh6,016 is Sh30,923. I make monthly Sacco contributions of Sh3,000, with a current total of Sh48,000 (being share capital of Sh30,000 and share deposit of Sh18,000). My rent is Sh7,000, water and electricity Sh2,000 and shopping Sh8,000. I also pay Sh2,500 a month into a table bank, which distributes savings and interest at the end of the year. I also have another chama of Sh3,200 that goes towards savings and loan payments (savings of Sh43,000 and loan balance of Sh34,000). I also have other loans from mobile applications

1) Sh29,620 – to be paid in one instalment in one month

2) Review your financial lifestyle: You do not seem to be living on a budget. This explains why the balance of Sh8,224 cannot be accounted for. A budget would help you keep a firm grip on your money and expenses to avoid wastage. You will have more disposable income which you can use to pay off some of the mobile phone loans. Use the 50/30/20 budgeting guideline. Prioritise 30 percent (Sh10,000) of your income for savings. Use 50 percent (Sh17,000) for necessary expenses such as rent, utilities, buying food, etc. The remaining 20 percent (Sh6,700) should be spent on wants or used to pay off some of the mobile loans. This budget guideline can be readjusted in light of your current financial situation and more money can be directed towards paying off mobile phone debts. This will free up more money for saving and investing. Track your money daily to ensure you know where every shilling is going. By recording your expenses on a daily basis and making weekly summaries per expense item, you will be able to create a monthly financial statement that will help you create a realistic budget in three months' time.