The economic downturn has hammered thousands of Nairobians into joblessness with the condition forcing many to carve out a space in low-income blue-collar jobs and hawking.
On a chilly morning, you will see resilient and hardworking men in Pipeline trekking to the industrial area to pursue peanuts in the name of daily wages. Some will congest the bus stations clinging to the hope that fares will go down.
In the heart of Nairobi, thousands of hapless tenants have gone months without paying rent thus attracting anger from the landlords.
The national minimum wage in Kenya stands at KES 15,120. However, some employees earn as low as KES 5,000 per month, especially waiters and house helps, with employers deducting the balance for food and sometimes accommodation.
For most Kenyans, the cost of basic commodities has ballooned to an extent that expenses surpass the income, leaving many with bad debts. Affording basic commodities and living comfortably within Nairobi is now a pipe dream for many.
Regardless of how low your wage is, you need to devise a tight budget to navigate the month stress-free within your means. Surviving on minimum wage can be difficult, but it is not impossible. Read on to find out how:
Allocate 25% for rent
(KES 1,250-KES 3,750 if earning between KES 5,000 and KES 15,000)
If you are a guard, construction worker, or hawker, you probably earn KES 500 in a day or KES15,000 in a month. Whether you are paid daily, weekly or monthly, you must save this amount as soon as you get paid to allow you to pay your bills on time.
You can get cheap rental houses in Nairobi, ranging from KES 1,000 per month in estates like Mukuru, Githurai, Kawangware, and Landimawe, among others.
Sometimes, staying farther away from the city can give you a cheaper house.
If not married, you can still live in a better estate and cost-share the rent with a friend.
Spend 20% on the bus fare
(KES 1,000-KES 3,000 if earning between KES 5,000 and KES 15,000)
In order to survive on a small salary, start by trimming down the transportation costs by being smart about your commute. Understand the shift in prices on your route to avoid fare hikes during rush hour.
To save on transportation costs, rent a house near your workplace. For instance, local restaurants and supermarkets pay waiters and tellers KES 5,000 monthly, but you do not need to spend on fare. In this case, spend your transport allocation on food or use it to build your emergency fund.
However, if staying far away to save on accommodation, commute during off-peak hours.
If your company offers staff transportation, don’t hesitate to use it.
Spend 30% on household necessities
(KES 1,500-KES 4,500 if earning between KES 5,000 and KES 15,000)
Buy maize and other vegetables in bulk from upcountry then proceed to make your own maize flour. Most posho mills charge as little as KES 20 to sift 2 kg of flour.
If buying from upcountry is not your cup of tea, you can visit Muthurwa Market, Ngara Market, and Wakulima Market for fresh food.
Set aside KES 500 monthly for healthcare
Health is wealth, and so your monthly budget is not complete without medical insurance.
If you are salaried, NHIF will make direct deductions. If self-employed or in the informal sector, make monthly payments of KES 500 to NHIF to take care of your healthcare needs.
It is important to learn that eating a balanced diet and managing your stress levels will keep you from visiting the hospital. Fruits and vegetables should be part of your daily meal.
Think about an Emergency Fund
Direct 25% every month (KES 1,250-KES 3,750) to your emergency fund to cover unplanned expenses and financial emergencies.
This will help keep your stress levels low and stop you from taking loans that will eventually tamper with your financial balance. An emergency fund worth three months of your salary is a good target.
Sample budget for someone earning KES 5,000 monthly
Rent – KES 1,000
Transport – KES 1,000 per month (KES 40 per day)
Food – KES 2,000
Medical care – KES 500
Emergency Fund/savings – KES 500
Goal: Work towards cutting your transport to zero, and making KES 1,000 more to increase your food budget to at least KES 3,000 and savings to at least KES 1,500.
If you manage to save KES 1,500 consistently for a year, you will have KES 18,000 which you can use to open a kinyozi or grocery stand to grow your income.
Sample budget for someone earning KES 15,000 monthly
NHIF (automatic deduction) – KES 600
NSSF (automatic deduction) – KES 200
Rent – KES 3,500
Transport – KES 3,000 per month (KES 100 per day)
Food – KES 5,000
Emergency Fund/savings – KES 2,700
Goal: You are living in a decent single room or bedsitter outside town, and have access to decent meals.
work towards making at least KES 6,000 extra to move to a bedsitter or double house (if you have a family) worth KES 5,000, increase your food budget to KES 7,000 and grow your savings to KES 5,000 per month.
If you save KES 5,000 consistently in a SACCO every month, you will have KES 60,000 at the end of the year, access to dividends, and eligibility to borrow KES 180,000-300,000 depending on the SACCO you join.
Use this loan to acquire property or new skills for better pay.
In conclusion, you can live well in the city while earning a minimum wage. The key is to budget early and cut costs in a practical manner. Setting aside some money for that rainy day will help you live comfortably even in financial emergencies.
It also helps to appreciate your current job even as you look for a better-paying one. In the meantime, improve your skills and work towards growing your income by joining a SACCO or other savings and investment schemes.
If you lack the willpower to save, you can grow your income by starting a business for your spouse or try a merry-go-round. Over the weekends, try taking up another job such as laundry, doing deliveries, or washing cars to make some extra money. Many people double their salaries this way.