Inside Politics

Frivolity: Why you never have enough money

Saturday, September 7th, 2019 00:08 |
Mobile money. Photo/File

  By Waithaka Gatumia

Why does it feel like there is never enough money? We have trained workers at minimum wage and directors making millions and this question always comes up. I never really had an answer until I met James.

James was a young entrepreneur who recently won a national competition with a prize package worth a few million shillings in seed capital for the business as well as business training at Centonomy. James’ business was located in his home village and had been doing very well serving the community. He was determined to grow his small business with the money he had won and was convinced the solution was to expand to Nairobi.

With the money he had, James made a plan to relocate his business to the city where he knew he would have access to a larger market which would mean more money and all his dreams would come true. At least that is what it seemed like before we did a project assessment. At Centonomy we never prescribe what a business or, for that matter, an individual should do with their money. We prefer to help you make informed decisions. Information is what James lacked.

You see, James had been promised an affordable bed-sitter by a friend located in Kikuyu area very close to the matatu stage. The only issue was that this was “affordable” for Nairobi. When compared to his rent upcountry, he would be paying twice the amount. Even though he would be close to the stage the transport cost to his place of work would also increase. One of the other benefits of living upcountry was that he had a small piece of land where he would grow most of his food, only having to supplement with a few items from the shops. In Nairobi, he would have had to buy all his food, significantly increasing his costs. Before he knew it all the money he had won would have gone toward the change in lifestyle even before he had acquired new customers.

I do not mean to dash James’ dream. All I am saying is that with some thought he could have used the prize money to work on his current business until it had made enough money to open an outlet in Nairobi, all the while enjoying an improved standard of living at home.

The reason it always feels like there is never enough money is that when our income increases we often immediately increase our expenses. Buying new things, moving to the new apartment with higher rent and forgetting to increase our saving and investment. When the money comes in, take a moment to think about what really matters to you and if you can afford it.

 I am not saying that you should never enjoy the increases you receive, all I am saying is manage them better. If you manage the increase, the gap between your income and expenses will grow and you will have more than enough money.

The writer is the chief executive Centonomy Ltd

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