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4 ways you can waste your salary and how you can stop it

4 ways you can waste your salary and how you can stop it

The man who invented money should be raised from the dead and awarded a Nobel Peace Prize. If not, then he should be awarded one posthumously. Were it not for him, the world of commerce would have been cold, dark, and uninhabitable, devoid of any currency. From the moment we conceptualized that we can exchange a few cowrie shells for whatever we wanted, a much-needed ray of sunshine penetrated an otherwise dank existence that was batter trade.

Since then money, in its numerous forms, has occupied human thought throughout the millennia. It has not only made commerce easier but also ensured that people do whatever they want as they’re compensated. From the time of the Industrial Revolution, the notion of salary has been the top thought in a working man’s mind. Were it not for money, very few, if any would risk trudging through the waking cycles to go to work on Monday.

As such, careful spending of your hard-earned money should be a priority. But like most humans, advice follows the path of least resistance going from one ear to the other without having any interaction at all with the brain. Careful spending is thrown out of the window as we let wastefulness in, not knowing that we’re reducing the quality of our lives.

Here are some of the ways we waste what we’ve worked hard for, and thankfully, how we can avoid it.

Not negotiating with your employer

This is probably one of the most overlooked methods of wasting your salary. It’s so featureless and colorless, we never see it at all. The goal of wastage, especially money, is to leave you with less of something, thus causing an inadequacy. Not negotiating enough for your salary smacks right into this. Having less salary, and especially having less because you never negotiated for it, can set you back severely. Though this might not be an active method of wastage, it has brought misery and frustration to new employees when they realize that what they earn is barely enough to support them. If you do not wish to work for peanuts, negotiate for your salary to ensure that you are paid your work\’s worth.

Now, I know that work is very scarce nowadays and with the evil twins of post-Covid times, little work and inflation holding the world by the throat, landing a job however unfulfilling, can produce feelings of achievement and exhilaration. However, you shouldn’t forget that you are working for pay. Unless you are in the “find what you love and you’ll never work a day” brigade, chances are that you are working an uninspiring job if only to put food on the table.

Life doesn’t start or end with putting food on the table. You must be compensated for the amount of work you do, and that means that you must negotiate with your employers when it comes to your salary.

Keeping up with the Whoever

This is the sure bet of wasting money and salary. Keeping up with the [insert rich neighbor\’s name], will not only waste your money faster than a sieve can leak but will probably cause you extremely high blood pressure. You have a right to live comfortably. That I agree with, but buying a washing machine because [reuse name here] bought a French-door Samsung refrigerator with Sabbath mode, when your gross untaxed salary is 50,000 blurs the line between madness and stupidity.

You must live within your bounds if you are to plug wastages that needlessly eat into your salary. Boundless comfort is for billionaires, and dollar billionaires for that matter, which I know you ain’t. Stick to your lane and drive your money according to your level of richness. This statement shouldn’t limit your imagination though. If you need more money, or if your comfort levels cannot fit into your salary, you can look for an extra source of income. Borrowing to touch up your image is a no-no. But you are allowed to borrow to start a business to get more money to finally live like your neighbors. Please head over to our website to register and we’ll give you an unsecured loan to make your dreams come true.

Excessive indulgence

There are three types of people in the world. Those who keep meticulous budgets, those who don’t, and those who don’t even know what I’m talking about. But like all things human, this difference is but superficial for there is only one thing that unites them: Entertainment money. This money does crazy things, some are even censored in Hell. Some slot it into their budgets while others spend willy-nilly, not caring where the bill might fall. I’m guessing a large majority are the willy-nellies as Entertainment money has been known to take up as much as 150% of some salaries.

I am a nice guy, and thus not inclined to crimp the roundedness of your mojo, but if you do not want to murder your salary, I’d suggest you limit your portion of Entertainment money. I have a clear understanding that Kenya runs on Alcohol on weekends but too much entertainment, be it liquid or smoked or live or whatever form your entertainment is, is not only bad for your health but is known to cause one of the worst conditions of the 21st century: Poverty.

Emotional Spending

Man is a creature that craves comfort, whether emotional or physical. And if he cannot find it naturally, then he is apt to want to buy it. And for some reason, if he finds he is addicted to it, he\’ll pursue it even with the possibility of destruction. Buying indiscriminately as a means to chase emotional comfort is one way to destroy your hard-earned money. Though it\’s advisable to gift yourself now and then, it’s a pure danger to be dependent on it, as this will make you buy things that you absolutely have no use for. This will make you look and sound not just vain but probably financially illiterate in the end.

Conclusion

Cutting back on spending might be a difficult job, and I hear you. But like all good things, they take time, cost too much in terms of emotional price, and have no business associating with a sane human. If you take time, however, and practice, you will overcome. Work hard and you’ll see the fruits of your labor.

30/10/2023
The Good, the Crazy, and the Weird of lending to family and friends

Money is an integral part of human life, touching every aspect of human existence. As old as money itself is the art of lending. From the dawn of commerce, people have lent each other money and that trend is not about to die. Financial institutions lend us approximately 403 billion shillings in 2023, showing how much lending is entrenched in our lives.

Though financial institutions have no qualms about lending us money, a good percentage of that lending occurs informally between family and friends. This informality is sometimes necessitated by the idea that lending folks we know, is better for reasons known only to psychology and Advanced Economics. At other times, though, ni kwa sababu wako CRB and thus banks, for a lack of a better word, hate them.

I’m going to assume that you have friends and family and that means that at some point you’ve had to lend. Lending to family and friends, like everything in life, is not expressly good or bad, but rather like a pendulum swings from good to sometimes absolutely crazy. Thus, as you prepare to lend, you must be aware of the three sides of the coin of borrowing, from the smile-inducing to the cringe-worthy.

The Good of lending to family and friends

Fostering deeper and more meaningful relationships

Lending money to family and friends brings people closer. Probably much closer than love. Show me a man who professes not to love money, and I’ll show you a seven-wheel car. They just don’t exist. Lending money if done right has the likelihood of forging and fostering meaningful relationships amongst family and friends.

This is because lending money usually is preceded by a given set of problems and therefore when someone comes to you umsort, and for some crazy reason you do it, then to them, you are a god. You become their hero, to the extent that they might even die for you just as long as they don’t lose their lives.

Further lending money provides you with a platform to teach your potential borrowers about issues such as prudent money management, and financial responsibility. Treat softly on this last one. Nobody likes to be lectured, no matter what their certificates say.

Also read: A Salary loan in Kenya

You might be lent when you need it

Lending money to friends and family sets you up, but sometimes not in a bad way. We all need help. It’s our nature. No human is complete unto themselves unless they\’re a work of art, which of course, they\’re not. Needing and, most importantly, getting financial help can be as painless as it can be but only if you also help. Being approachable, and lending people money now and then, will enable you to get help when you need it.

However, and I cannot stress this enough, never lend to borrow in the future. If that’s your plan, then I suggest that you procure yourself a nice, big fat vale to fill with your teary disappointments. Humans are funny and some are selfish, only happy with what they can gain. Thus, if you’re prepared to lend do not expect to be lent.

And if you’ve tried to borrow from family and it’s hit a wall, head over to our website or download our app from the play store and register for a Salary Advance. We will sort you out because we understand that sometimes you need the cash.

The Crazy

Repayment might never come

We’re African. Those two words have multiple folds of hidden meanings that if unraveled can spawn books that could fill the whole world. In the financial context, they mean that how we act in and around money is very different. Money borrowed from family is sometimes never to returned. And that’s that. No matter what financial websites preach and exhort, telling you how you should hammer out a repayment plan with your family before you lend and other financial jawing, we know that it’ll never happen.

When lil’ bro tells you umsort atakurudishia baadaye, consider that money gone into the ether. That baadaye might occur in the post-apocalyptic world. And when you start hounding him to repay you, brandishing the repayment plan, then you and your money might become the subject of intense study, producing subject matter experts into pockets of your life you never knew even existed.

So, when lending money, especially to family and friends, you should be aware that it’s not a boomerang.

You might go broke

We all love to help but even as you do, you must be careful that you do not over-extend the reach of your finances. Nobody (except sadists) wants to see their loved ones suffer, especially if they can help it. When friends come to you with a certain problem asking for a small loan, you might be inclined to lend. After all, that’s what friends are for.

If you extend help further that it was designed to go, the likelihood of going broke and landing in debt out of the goodness of your heart might be a real possibility. Too much of a good thing, as they say, might not be good for your health. Be careful.

The Weird

You might be resented or even hated

The fastest way to ruin a perfectly good relationship, be it family or friends, is to ask for ile pesa nilikusaidia. People LOVE borrowing, but absolutely loathe paying back. This is more so for money borrowed from family and friends. Social media is awash with overgrown tales of money borrowed and not repaid. For some reason, not yet understood by academics, people are comfortable paying bank loans without batting an eye, but turn into thermonuclear warheads when it is time to pay what they borrowed from family and friends.

So, when you extend a loan to Brayo, know that wanting it back might not only irreversibly damage your friendship but also subject you to a resentment that stinks to the high heavens. God might buy have to buy an air freshener.

Nobody might lend you when you need it

Lending money to family and friends distorts the lens they use to view you. They’ll think you’re rich and rich people never need financial help, right? When the title of the Family Bank has been unofficially conferred to you, Mon Ami(e), you’re doomed.

When you lend, therefore, beware that people are not inclined to be as compassionate as you are. But, as the Good Book says, blessed is the hand that gives. Give freely but only if you can afford to lose it.

30/10/2023
Saving Challenge 2024: How you can save money in the new year
Are you tired of watching your hard-earned money slip through your fingers each month? Then I think it’s time to take control of your finances and start saving. I understand that saving money can be challenging, but it is an essential skill to have to secure your financial future. This is especially so if you want to build a healthy financial foundation; you must make saving a priority. In this article, we’ll provide some simple but effective strategies for putting more money aside each month.

Why you should save

There are many reasons why you should save money. Some of them include:
- Building an emergency fund: An emergency fund is a set amount of money that is set aside to cover unexpected expenses, such as a car repair or medical bill. Having an emergency fund can provide peace of mind and protect against financial shocks.
- Planning for large purchases: Saving can also help you plan for big expenses, such as a down payment on a house or a new car. By setting aside money over time, people can make these purchases without going into debt.
- Retiring comfortably: Saving for retirement should be an important goal for you. By setting aside money regularly and investing it wisely, you can build a nest egg that will provide financial security in your golden years.
- Leaving a financial legacy: You might save to leave a financial legacy for your loved ones. By building up your savings and investing in assets such as stocks and real estate, you can create a lasting source of wealth for your family.
- Achieving financial independence: Finally, you can save to achieve financial independence. By living below your means and saving a significant portion of your income, you can eventually reach a point where you no longer have to rely on a traditional job to support yourself.
Methods of saving a buck: Traditional and creative

Traditional methods

The traditional ways to save money and increase income include:
1. Cutting expenses: One of the most common ways to save money is to cut expenses. This involves identifying areas where you are spending more money than necessary and finding ways to reduce or eliminate those expenses. For example, you could cut back on eating out, switch to a cheaper cell phone plan, or cancel subscription services that you do not use.
2. Increasing income: Another way to save money is to increase your income. This can involve finding ways to earn more money from your current job, such as asking for a raise or taking on additional responsibilities. Alternatively, you could look for a new job that pays more, start a side hustle, or invest in assets that generate passive income.
3. Creating a budget: Creating a budget is a crucial step in saving money and increasing income. A budget allows you to track your income and expenses, identify areas where you can cut back, and plan for future expenses. By creating and sticking to a budget, you can make sure that you are spending and saving your money in a way that aligns with your financial goals.
The Creative

There are many creative ways that people can save money, beyond the traditional methods of cutting expenses and increasing income. Some of these ways include:
1. Using cashback apps and websites: Many cashback apps and websites offer rewards or cashback for making purchases at certain retailers or for completing certain tasks, such as answering surveys or watching videos. By using these apps and websites, you can save money on your everyday purchases and earn some extra cash at the same time.
2. Swapping items instead of buying them: Instead of buying new items, consider swapping them with friends, family, or neighbours. For example, you could swap clothes, books, or DVDs instead of buying new ones. This can save you money and help you to build a stronger community.
3. Using public transportation or carpooling: Instead of driving your own car, consider using public transportation or carpooling to save money on gas and car maintenance. This can be a great way to save money and reduce your carbon footprint at the same time.
4. Growing your own food: Instead of buying produce from the grocery store, consider growing your own food. This can save you money on groceries and can provide you with fresh, healthy food.
5. Using DIY solutions: Instead of hiring professionals for home repairs or other tasks, consider using DIY solutions to save money. For example, you could learn how to fix a leaky faucet or paint a room yourself instead of hiring a plumber or painter.
6. Negotiating bills and fees: Many bills and fees, such as cell phone bills, cable bills, and credit card fees, are negotiable. By negotiating with your service providers, you may be able to reduce your monthly expenses and save money.
7. Using coupons and discounts: Coupons and discounts can be a great way to save money on everyday purchases. Look for coupons and discounts in the newspaper, online, or in-store, and use them to save money on groceries, clothing, and other items.
8. Selling unused items: Many people have items that they no longer need or use, such as clothes, books, or electronics. By selling these items, you can make some extra money and declutter your home at the same time.
9. Renting out your space: If you have extra space in your home, such as a spare bedroom or a garage, you can rent it out to make some extra money. This can be a great way to save money on your own living expenses and earn some extra income.
10. Sharing resources: Instead of buying things that you only use occasionally, such as tools, appliances, or sports equipment, consider sharing them with friends or neighbours. This can save you money and help you to build a stronger community.
It doesn’t matter what method you choose to save or why you’re doing it. The key lesson is that as we get into the New Year, you should turn a new leaf. Saving money should be the first subtopic on that list. Save money as regularly as you can because you never know. One day, that money might save you. Good luck and Happy New Year!!
30/12/2022
Hela Pesa Survival Guide: How to stop wasteful spending
Wasteful spending can be a major drain on your finances, leaving you with less money to save or spend on things that truly matter. It’s easy to rationalize unnecessary purchases, telling ourselves that we deserve to treat ourselves or that we need a certain item to be happy. However, this kind of thinking can quickly lead to financial trouble.

To stop wasteful spending, it’s important to first become aware of your spending habits and identify areas where you tend to overspend. This may require tracking your expenses for a month or two to get a better sense of where your money is going. Once you have a better understanding of your spending patterns, you can start to make changes and develop healthier habits.

Why you are overspending

There are several reasons why you tend to spend more than you need. They include:
- The influence of advertising and marketing: Companies spend billions of dollars each year on advertising and marketing to persuade people to buy their products, even if they do not necessarily need them. This constant exposure to advertisements can lead people to believe that they need certain products and can convince them to make unnecessary purchases.
- A desire for instant gratification: People often have a desire for instant gratification and may be willing to spend money to satisfy their immediate needs and desires. This can lead to overspending on things like food, clothing, and entertainment.
- Peer pressure: People may also be influenced by their peers and social circles to spend more than they need. For example, people may feel pressure to keep up with the latest trends or to maintain a certain lifestyle, which can lead to excessive spending.
- Difficulty managing money: People may have difficulty managing their money and may not have a clear understanding of their financial situation. This can lead to overspending, as people may not be aware of how much they are spending or may not have a plan in place to manage their finances effectively.
- Impulse buying: Some people may have difficulty controlling their impulses, which can lead them to make impulsive purchases without thinking about the long-term consequences. This can be particularly true for people who have underlying conditions such as attention deficit hyperactivity disorder (ADHD), which can affect impulse control. Many people tend to make impulsive buying decisions without thinking through the consequences of their actions. This can lead to overspending on things that are not necessary or useful.
- Lack of budgeting and planning: People who do not have a budget or a financial plan in place are more likely to overspend, as they do not have clear guidelines for how to manage their money. This can lead to excessive spending on things that are not necessary or that do not align with their long-term financial goals.
- Emotional regulation: For some people, spending money can be a way to regulate their emotions. For example, if someone is feeling down, they may engage in retail therapy, buying things that make them feel happy or distracted. However, this can be a short-term solution that only leads to wasteful spending.
- The pleasure or reward response: Spending money can trigger the release of chemicals in the brain, such as dopamine, which can produce a feeling of pleasure or reward. This can make spending money feel enjoyable and can lead people to engage in wasteful spending to seek out this pleasurable sensation.
The things that might be wasting your money

Several expenses commonly waste money that you might not even be aware of. Some of these expenses include:
1. Late fees: Late fees can be a significant source of wasted money, especially for people who frequently miss payment deadlines. To avoid late fees, make sure to pay your bills on time and set reminders to help you stay on top of your payments.
2. Interest on credit card balances: Credit card interest can add up quickly and can be a significant source of wasted money. To avoid paying interest on your credit card balances, make sure to pay off your balances in full each month and avoid carrying a balance from one month to the next.
3. ATM fees: ATM fees can add up quickly, especially if you use ATMs that are not part of your bank’s network. To avoid ATM fees, make sure to use ATMs that are part of your bank’s network or that do not charge fees.
4. Subscription services that you don’t use: Many people have subscription services that they do not use, such as gym memberships, streaming services, or subscription boxes. To avoid wasting money on these services, make sure to cancel any subscriptions that you do not use regularly.
5. Unnecessary purchases: People often make unnecessary purchases, such as buying things they do not need or buying things they can get for free elsewhere. To avoid wasting money on unnecessary purchases, make sure to think carefully before making any buying decisions and to consider whether you really need something before you buy it.
Why wasteful spending might be bad for your financial health

The long-term impacts of wasteful spending can be significant, both financially and in other areas of life. Some of the potential impacts of wasteful spending may include:
- Financial strain: Wasting money on unnecessary expenses can put a strain on a person’s budget, leaving them with less money to cover their essential expenses or save for the future. This can lead to financial insecurity and a lack of stability.
- Debt: If a person engages in excessive or reckless spending, they may end up accumulating a significant amount of debt, which can be difficult to repay and can have negative consequences for their credit score and overall financial health.
- Stress and anxiety: Wasting money can be a source of stress and anxiety, particularly if it leads to financial difficulties or creates tension in a person’s relationships. This can harm a person’s mental health and well-being.
- Lost opportunities: Wasting money on non-essential expenses can mean that a person has less money available to invest in things that could improve their quality of life, such as education, travel, or personal development. This can limit their opportunities and hinder their ability to achieve their goals.
How to stop wasteful spending on its track
1. Create a budget: The first step to avoiding overspending is to create a budget that outlines your income and expenses. This will help you to understand how much money you have available and where you can cut back.
2. Set financial goals: Having clear financial goals will help you to focus on what is most important to you and to avoid overspending on things that do not align with your priorities.
3. Stick to your budget: Once you have created a budget, it is important to stick to it as closely as possible. This means avoiding unnecessary purchases and making sure that you do not spend more than you have allocated for each expense category.
4. Track your spending: Regularly tracking your spending will help you to stay on top of your finances and to identify any areas where you may be overspending. You can use a financial app or software to help you track your expenses and make sure that you are staying on budget.
5. Avoid impulse buying: Impulse buying is a common cause of overspending, so it is important to avoid making impulsive purchasing decisions. Take the time to think about whether you really need something before you buy it, and consider whether you can find a better deal or save money in other ways.
6. Use cash instead of credit cards: Using cash instead of credit cards can help you to avoid overspending as it is easier to see how much money you are spending in real time. Plus, when you use cash, you are less likely to make impulsive purchases as you are physically handing over money.
You must understand, however, that what I’ve written here is worth exactly less than nothing if you do not put your back into it. You must not only be willing to accept that you might be overspending but also take the necessary steps to consciously avoid overspending.
23/12/2022
Simple financial tips to keep in mind this festive season

Personal, according to the Advanced English Dictionary, means something that affects or concerns a particular person in their private life and personality. Since the topic of this blog involves the word personal and finance it thus means that when it comes to the management of personal finance, you get the last word. What you do with your money is your business, and thus out of the privy of the general public since personal finance is, well, personal.

But since the moment humans learned to communicate through language, advice has been more or less bundled into that communication. Thus, although personal finance is, well, personal, I could tell you a thing or two that I feel you could adopt to ensure that you manage your finances to provide maximum utility.

Skills You Need talks of personal finance as involving being aware of your position financially and then undertaking steps to ensure that you have meaningful outcomes that you can be proud of in the end.

Some things that you could do to manage your finances better might include:

Be aware of the limits of your income

Money is a resource. And like all resources used in satiating limitless and sometimes needless human wants, it is scarce, for scarcity is what confers value and thus utility. However, this last one is highly subjective. Thus, this scarcity dictates that money should be managed prudently and effectively to provide the highest utility values.

Since they pay you in currency, which is money, it means that what they pay you is probably not enough to cover all the exposed parts of your financial anatomy. This, therefore, means that you must know how far you can stretch your income before it snaps and hit you right between the eyes in the form of debt. To avoid the embarrassment of debt, you must be able to prudently manage your money, ensuring that you exercise financial brevity for brevity is the soul of wit. Using your money correctly will make the world see you as a smart person indeed.

Save whenever and wherever

A lot of literature, both online and offline extolls the virtues of saving. Saving refers to the act (you must do it, not just think about it) of setting aside some portion of your income to cover unprecedented outcomes, mostly negative, in the future or to accomplish a given task in the future. On the battle of whether you should save before or after, I do not know enough to actually form an opinion. Do as you see fit.

Now, saving has been difficult even in the best of times, and now with the advent of Covid-19, the level of difficulty is far above the reach of most ordinary folks. This smacks true for us in Kenya, where inflation is in a hurry to reach its teens while wages, not in a hurry to catch up, are sticky flowing with the grace of bitumen. It barely moves and if it does you never see or feel it.

Evil, as Stephen King says, has a way of popping up full-blown and ready to go. Saving, which is the direct opposite of evil (that title goes to wastage), takes time, slowly dragging itself into use. But like all things good, the pain usually comes before the gain. This means that no matter what happens, you must strive to save.

But like all things in life, you cannot plan for the future and sometimes misery brings along its distant relatives into your life to keep it company. Sickness and other crazies can wipe out your savings no matter how prudently you save. If this happens to you, head over to our website or download our app for a quick salary advance to sort yourself out in case your savings run out. We got your back.

Try to invest

Investment, an offshoot of savings, is the act of purchasing assets, which might be in the form of land, for example, to earn a return on the money you invested. The sole aim of investing, as opposed to saving, is to increase an individual’s wealth.

To better manage your finances, you are better off if you learn to invest prudently. One of my favorite lines in investing is by Warren Buffet, the CEO of Berkshire Hathaway. He said, “I do not look for six-foot poles to jump over, but rather one-foot sticks to walk over”. This means that it doesn’t have to be complex. But like all things good, investment can be difficult and mind-boggling at first. Dogged determination can get you far, and might go a long way in helping you dodge the glaring blunders that novice investors make. Time spent on the internet, or on books will go a long way in helping you figure out the best investment vehicle.

However, if it’s all a conundrum to you, you can look for brokers and do your investments through them for they might be well versed in these matters. Remember, the goal is to invest.

Have an Extra Income

This might not be traditional in the financial management camp, but extra money has never hurt anyone. My thinking might be convoluted, but sometimes money can be so tight that no matter how prudently you manage it, it just never cuts it.

To loop around this, I think you should look for extra income if you can get it, that is. A side hustle will give you the peace of mind to better manage your affairs, for that too is the purpose of financial management. This side hustle, be it a business or a skill that you’re good at, will provide that extra oomph you need to live comfortably.

If you need funds to start your side hustle, you could head over to our website or download our app to get funding to unlock your potential.

09/12/2022
Check Off Loan

What is a check-off loan?

A check off loan is a type of loan provided by an employer to an employee, with the loan payments being deducted directly from the employee’s salary. The employer acts as a facilitator of the loan, as they are responsible for deducting the loan payments from the employee’s salary and forwarding the payments to the lender. This type of loan can be convenient for employees, as the loan payments are automatically deducted from their salary, making it easier for them to manage their finances.

Types of check-off loans

Several different types of check-off loans may be offered by employers, including personal loans, car loans, and mortgage loans. In some cases, employers may offer check-off loans as a benefit to their employees, while in other cases, the loans may be offered through a third-party lender.

Check-off loans can be an attractive option for both employees and employers, as they offer several benefits. For employees, check-off loans can provide access to credit that may not be available elsewhere, and the automatic deduction of loan payments from their salary can make it easier to manage their finances.

However, both employers and employees need to be aware of their rights and responsibilities in relation to check-off loans. In many countries, there are specific laws and regulations that govern this type of loan, and it is important for employers to ensure that they are compliant with these laws. This may include obtaining any necessary licenses or permits, and ensuring that the terms of the loan are clearly communicated to the employee.

There are also potential drawbacks to check-off loans for both employees and employers. For employees, the main disadvantage is that their loan payments are deducted directly from their salary, which can affect their cash flow and make it more difficult to budget. Additionally, employees may not fully understand the terms of their loans and may end up paying more in interest and fees than they anticipated.

For employers, offering check-off loans can be a time-consuming and administratively intensive process. Employers must negotiate the terms of the loans with the financial institution, manage the payroll deduction system, and ensure that employees are making timely payments. Additionally, there is the risk that some employees may default on their loans, which can create financial problems for the employer

How check-off loans work

To obtain a check-off loan, employees typically need to complete a loan application and provide proof of employment and income. The employer then negotiates the loan terms on behalf of the employee with a financial institution, such as a bank or a credit union. Once the loan has been approved, the employer sets up a payroll deduction system to automatically deduct the loan payments from the employee’s salary.

Check-off loans in Kenya can be used for a variety of purposes, including to cover unexpected expenses, to finance a large purchase, or to consolidate debt. The terms of these loans vary, but they typically have a fixed interest rate and a fixed repayment period.

It is important for both employees and employers to fully understand the terms of a check-off loan before agreeing to it. Employees should carefully review the loan agreement to ensure that they understand the interest rate, fees, and repayment terms, and should ask questions if anything is unclear. Employers should also ensure that they are able to manage the payroll deduction system effectively and that they are able to handle any potential default issues that may arise.

Advantages of check-off loan

There are several advantages to check-off loans for both the employer and the employee. One advantage is the convenience factor. For the employer, offering check-off loans can be a cost-effective way to provide financial assistance to employees without the need for a dedicated HR or finance team to manage the process. For the employee, check-off loans can provide a quick and easy way to access credit, without the need to go through a traditional loan application process.

Another advantage of check-off loans is that they often have lower interest rates than traditional loans, as they are considered to be low-risk for the lender. This can make check-off loans a more affordable option for employees who may not have access to other forms of credit, or who may have poor credit scores.

In addition, check-off loans can be a useful financial tool for employees who need to borrow a small amount of money for a specific purpose, such as paying for an emergency expense or making a small purchase. These loans can provide employees with the financial flexibility they need to handle unexpected expenses or make necessary purchases, without the need to rely on credit cards or other forms of high-interest credit.

Overall, check-off loans can be a convenient and affordable option for employees who need to borrow a small amount of money and can provide valuable financial assistance in times of need.

Disadvantages of check-off loans

One disadvantage of check-off loans is that the loan repayments are deducted directly from the employee’s salary, which can cause financial strain if the employee is already living paycheck to paycheck. In addition, if the employee loses their job or experiences a reduction in salary, they may struggle to make the loan repayments, which could lead to default and damage their credit score.

Another disadvantage of check-off loans is that they may not be suitable for larger purchases or investments, as the loan amounts may be limited. This can be a problem for employees who need to borrow a larger sum of money for a specific purpose, such as a down payment on a house or a business investment.

In addition, check-off loans may not offer the same level of flexibility as traditional loans. For example, the loan terms and repayment schedule may be fixed, meaning that the employee may not be able to make additional payments or pay off the loan early without incurring additional fees.

Finally, check-off loans may not be available to all employees, depending on the employer’s policies and the employee’s job status. This can limit the access that employees have to this type of financial assistance, and may make it more difficult for them to obtain credit in the event that they need it.

Conclusion

Overall, while check-off loans can be a convenient and affordable option for employees who need to borrow a small amount of money, they also have several disadvantages that should be carefully considered before taking one out.

06/12/2022
Five Things To Keep In Mind About Personal Finance
Personal Finance

Managing personal finance is a long-term commitment that can confuse even the most seasoned financial veteran. The issue is over time even a well-thought-out plan can run out of steam due to circumstances out of our hands.

Personal finance covers both short-term and long-term goals pertaining to your financial goals. Personal finance skills are essential regardless of your age or income. If you need to learn how to manage your finances you have come to the right place

Personal Finance

Personal finance is a broad term that covers money management, savings, and investment. Personal finance can be summed up as the knowledge of how to plan your financials by understanding personal cash flow and coming up with a solid plan to manage it to meet your financial goals.

Why is it important to manage your personal financials

To avoid being in a constant financial crisis mode. When you don’t have your financials in order, any small emergency will turn into a crisis.

During the coronavirus pandemic, the entire economy shut down for months forcing governments to intervene, if they could afford it. The majority lost their jobs and without a social safety net in Kenya, you were expected to float on your own. It was a painful experience that left the majority of the populace at the mercy of government handouts that rarely came.

Those who had savings faired well, especially those who were willing to cut back on expenses and focus on important needs.

This is why personal finance is important. Having a good grasp of money and how to manage it can lead to a better quality of life.

Personal finance is a broad field and covers a lot of topics. We are going to look at five of the most important that you should keep in mind.

Debt

Debt is often underestimated when people evaluate how important it is going to be in their financial plans. Debt plays a crucial role in huge purchases we undertake in life. Debt is used to finance land purchases, house construction, vehicle purchase, and education.

So the question is how do you manage your debt? How much debt can your income finance?

Debt has a cost just like any other good you purchase. This is the interest you pay on the loan. When budgeting for a debt, you should understand its cost in form of interest and how long you will pay for it. The outcome of these calculations will give you the true cost of the debt.

How you use your debt will define its place in your personal finance statement.

Most large loans will have a predefined use; like a mortgage which can be used to finance a house purchase, or a car loan for a vehicle. Why you make this purchase is important since they may help in repaying the loan or force you to bankruptcy. A good loan leaves you with an asset after you have finished your payments.

Credit is not a loan. Credit doesn’t have any predefined use. They are short-term 1 to 12 months compared to loans which have 5 to 10 years repayment plans.

Income

Income is the source of revenue for your personal finance. You can have more than one source of income. The amount of income you bring in will be the source of all your personal spending and savings. Your gross income will take care of your taxes and deductions. After deduction, you are left with net income to budget for your needs and wants. We recommend the 80/20 rule to help you in your budgeting.

Income can have different sources. This include:
- Wages
- Dividend
- Rental income
- Salary
It is important to note that your income will determine your liquidity. Most of your savings can’t be accessed all the time otherwise they stop being savings accounts. Your income budget should take care of emergencies.

Saving

Savings are what you keep after you have taken care of your personal expenses. Saving is armed to cover large expenses and emergencies. Savings offer opportunity cost since it’s idle money. Liquidity can be traded through borrowing. It has good returns through interest if you are willing to loan your savings through an intermediary like a bank.

Banks offer access to money markets by functioning as an intermediary between the saver and the borrower.

Various institutions offer consumer savings in Kenya. This includes:
- Saving Banks
- Deposit-taking Saccos
- Mutual Saving banks
- Credit co-operatives
Do your research on institutions near you and see which has the best returns on their savings account.

Note that savings should not be treated as investments. Savings are for covering emergencies in the long term while investments are for long-term increases in personal wealth.

Investing

Investing involves purchasing assets on the premise that they will appreciate in value and increase the value of your investment.

Investing is aimed at increasing the value of an individual’s wealth by speculating on the future growth of the asset. Investing unlike savings carries a risk due to exposure to market volatility and can register a loss on your investment.

Investing can be quite complex and can take a while before one is good at it. Moreover, it is important that you educate yourself on the simple functioning of the markets to get a good idea of how the market behaves.

There are several forms of investment currently in the Kenyan market. Some of them include:
- Bonds
- Stocks
- Commodities and derivatives
- Mutual funds
- Index Funds
- Exchange-traded funds
Investments carry huge risks because they tend to have huge returns for those that make them. It’s important to understand the industry you are investing in to see if it has future growth potential.

Spending

Nobody can survive in the modern world without spending. Most of our income goes to personal expenditures that just can’t be avoided. Spending can get out of control if not well managed.

Spending is the outflow of cash from income. The bulk of income goes to spending including basic needs like housing, food, and clothing.

Spending should fit into your budget. By planning your spending you can finance your purchases without any need of borrowing which comes with an extra cost. Plan to live within your means to minimize unnecessary spending.

Spending decisions are always dictated by income. This means you have to make choices on what you spend and the utility you will get out of the purchase.
25/11/2022
Tactics to Saving Fuel this Festive Season
Oil is the opium of the world. The dose that keeps the world patient while it’s being overloaded with climate change, extremism, poverty, and every other manner of garbage. The world is addicted to it and I doubt if there is any detox program to wean itself off. To put it into perspective, the world consumed close to 99.4 million barrels of oil per day this year. This addiction has made the House of Thani family of Qatar very rich, by the way. The family is worth close to $335 billion. Meaning that if they add nothing to their fortune and consume $1 billion a year, their fortune will run out in the year 2357. Yeah.

Oil and its offsprings get us high, and we’re never coming down. But, being the good humans we are, moderation is our virtue, and although we love largesse, our conscious dictates we save here and there. This is why I bring you this post ladies and gentlemen. We are speeding into the festive season at sixty minutes per hour. The period when we spend and simultaneously strive to save. To reach my quota of goodness this year, I am going to offer some insights to help you save fuel this season. Ready? Let’s Go…

Clean your filter and change your engine oil

This is Saving Fuel 101. Want to save fuel? Service your vehicle.

Saving fuel has never been this easy, but many people never bother. As a distinguished member of the Amateur Mechanics Association of Kenya, I bring you a special message from the automotive gods. Change or clean your filter regularly and you will save a lot of fuel. Don’t believe me? Well, try to keep up.

Everything requires oxygen to burn, including the fuel in your engine. The work of an air filter is to, well, filter the air of dust and other debris from getting into your engine and damaging it. However, if it’s clogged, less air passes through and thus little of it enters the engine. From basic science, we know that air is made up of approximately 21% Oxygen. Less than a quarter. So the less air, the less oxygen available for burning your fuel. Your engine, on the other hand, has a fixed capacity and if less air is drawn into the cylinder per charge, it will gladly fill the remaining percentage with extra fuel. Resulting in a rich mixture. Since there is less air to burn that fuel, the oxygen will bind with whatever fuel it can burn and release the rest of the unburnt fuel as black smoke. Do this a few thousand times per minute and your vehicle turns into a fuelaholic. A guzzler. Consuming your fuel in a manner likely to suggest that it doesn’t like you. Which is terrible, especially if you intend to save on fuel.

Oil, as you know, lubricates your engine. If you don’t change it regularly, it becomes heavy. Which in turn reduces its lubricating capability, making the engine strain to overcome the extra friction, making it work harder than necessary. And you know what happens to an engine when it works hard? No, it doesn’t get paid more, Ernesto. It consumes more fuel. Jeez!!!

Reduce idling and unnecessary revving

Idling is sometimes unavoidable in the modern world. And the more modern the world becomes, the more our vehicles will idle. This is a fact that won’t save you fuel, anyway. We spend more time at junctions, red lights, and traffic jams because the infrastructure grows slower than the rate we buy cars. On average, it’s estimated that we spend close to 3-4 hours every day on the commute. Keeping your car idling for even a third of that time will cost you about 0.64 liters of fuel. This is because, as the engine idles, it’s consuming fuel, doing no work. Wasteful. If you’ve to spend more time idling in traffic jams, the best strategy is to turn off your engine. This will help you save fuel because your engine will only run to drive your vehicle. Now that’s smart.

Note: Don’t do this if your engine has a hard start. It will embarrass you.

Revving you’re your engine is the most wasteful thing you can do. Some motorists rev their engines after starting. Why? It’s pointless and adds nothing except waste fuel by unnecessarily straining the engine. The basic procedure is to start, idle, and drive. Unless your engine has a hard start, don’t rev it, especially if you’re trying to save fuel. However, if you’re not trying to save fuel, rev baby rev.

Avoid thrashing your engine

If you have a heavy foot, go see a doctor. It might be a condition. But if seeing a doctor is not on your bucket list, then hear me out. Putting the pedal to the metal, the symptom of a heavy foot, will not:
1. Make you go any faster
2. Make you look any cooler
3. Save you any fuel
Unless you have an electric car, which I know you don’t desist from smashing the pedal to the floor. This is because your car weighs at least a ton, and therefore will need to overcome its inertia before picking up any discernible speed. Suddenly stomping on your accelerator, as you move, opens the throttle body wide allowing maximum fuel into the engine with little work. All this just wastes your fuel.

This also goes for your driving. Unless you’re a getaway driver in a robbery, it makes little sense to make your engine scream. Learn to operate your engine at optimum rpm to suit your driving. This will not only help save you unnecessary visits to the mechanic, but it will also go a long way in helping you save on fuel.

Walk

No brainer. The best way to save fuel is to not use your car.

Get a Prius

This is my favorite. If you have some 3 Million shillings lying about that you have no use for, get yourself a Toyota Prius. This move will save you some crazy amounts of fuel. According to Toyota, the Prius returns about 56 mpg combined. For every 100 km traveled, a Toyota Prius will use an average of 4.2 liters of petrol. A Premio returns 8.3 liters per 100 km. If you were to travel from Mombasa to Kisumu, a distance of about 825.5 km, assuming every other thing is held constant except fuel, the journey will cost you about 6,000 shillings in a Prius. Yeah, I know, that’s 4000 more than an Ena Coach ticket. That’s, however, about 6,000 shillings less than what a Premio will consume in fuel. What’s more, you will finish the journey earlier as the Prius has 136 hp compared to a Premio’s modest 125 hp. Talk about being outclassed.

Please Note;

This is not an exhaustive list. It’s but a tip of a very long list. However, if you are to learn anything from the list, it’s that it doesn’t need to take drastic measures to save fuel (well, except the last one). Doing the above will save you a lot of money in the future. And as you speed along into the festive season, I wish you nothing but the best and happy fuel saving.

Sorry, it’s me again. I couldn’t leave you without a call to action so, here goes nothing. Hela Pesa Salary Advance supports this post. Please head over to our website or download the Hela Pesa App for a quick Salary Advance this festive season.
23/11/2022