How to make a budget that actually works in Kenya
A step-by-step way to build a monthly budget on a Kenyan income, using an adapted 50/30/20 rule that makes room for family support, chamas and saving.
Quick answer
List every debt with its balance, interest and minimum payment. Pay the minimum on all of them, then put every extra shilling on one debt: the smallest balance first (snowball) for quick wins, or the highest interest first (avalanche) to pay less overall. When one is cleared, roll its payment into the next.
Key takeaways
- 1Stop borrowing to repay borrowing.
- 2List every debt in one place.
- 3Pick snowball for motivation, avalanche for savings.
- 4Roll each cleared payment into the next debt.
Step 1: Put every debt on one page
Mobile loans, overdrafts, credit cards, SACCO loans, chama loans and money owed to family. Write the balance, the interest or fee, and the minimum payment for each.
The debt snowball
Pay the minimum on everything, then attack the smallest balance with every extra shilling. Clearing a debt quickly builds momentum, which is why the snowball works well for people with many small mobile loans.
The debt avalanche
Pay the minimum on everything, then attack the debt with the highest interest rate. You pay less in total, but the first win may take longer.
Stop the leak
Neither method works if new loans keep arriving. Delete instant loan apps, keep a small emergency buffer, and talk to lenders early if you can't pay. A missed payment reported to a credit reference bureau can follow you for years.
Questions people ask
Which is better, the snowball or avalanche method?
The avalanche saves more money because it clears high-interest debt first. The snowball keeps people motivated with quick wins. The best method is the one you will stick to.
Centonomy team
Plain-language money guides from Centonomy, to help you move from knowing better to doing better.
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