I Live Paycheck-to-paycheck. How Do I Raise Sh1 Million To Complete My Retirement Home?

A consolidation of your expenses shows that you spend Sh34,000 of your net income, and only have a surplus of less than Sh500 left every month. Your saving grace is in the Sh30,000 that you have saved in your emergency kitty.

Going by your figures, out of the Sh108,000 loan that you took from your Sacco, you have repaid about Sh71,000 and have a remaining rounded balance of Sh37,000. This is equivalent to about seven months of servicing. If you were to stretch yourself and redirect your current savings of Sh5,000 to fight out this debt, you can effectively cut the repayment period to just three and a half months.

This means that by the end of July this year, you would be able to release all funds directed at loan repayments, which would be an equivalent of Sh10,084. These funds, if deposited in your Sacco account for the remainder of the year starting August, would total Sh50,000 (minus dividends).

Continue to build this up throughout the year 2025 and youd close that December with a total of about Sh188,500 if there is an annual dividend of at least 10 per cent.

You have bank savings of Sh40,000. It is important to be clear about why you are saving at the bank. Is this money for your liquidity? Whats the purpose? The reason you need to have a purpose is because savings at the bank do not earn any meaningful interest. In fact, if these savings are in a current account, they are just money sitting idle and losing value to inflation. Money needs to grow on a daily basis. For example, a good alternative would be to combine these funds with your Sh30,000 emergency funds and put them in a solid money market fund (MMF).

This will have two-fold benefits.

One, your money will start to earn compounded interest on a daily basis (albeit small) instead of sitting idle at the bank.

Two, you will have quick access for when and or if you may need to pull out the money. I would, however, caution you to do your due diligence and only invest in an MMF, you fully understand since previously, some local MMFs who promised glitter have been known to have crashed.

It would be recommendable that you readjust the amount you spend on tithe downwards, but tithe is mainly a matter of personal belief, and your position on this is not clear.

However, this should not be cast in stone, especially where your expenditure leaves you with nothing.

You might also want to check where you send the Sh2,000 you spare for weddings, funerals and such communal activities since these dont occur on a regular basis.

Is this money saved in a chama or merry-go-round? Is it saved in a bank? If it is not committed to a particular vehicle, top it up on your MMF. However, have a sheet where your draw what each of the three separate amounts consolidated in this MMF are for and the returns according to their respective ratios.

On your home project, I would advise that you complete the house bit by bit. For example, if you have set up the structure, plan for the windows and door frames as the next phase, then plastering as the follow-up phase.

You can do this room by room at your own pace. At a maximum, this would only cost you one fundi, one labourer and a few materials.

You will not be overwhelmed with costs and neither would you need to take up debts, especially since this home project will not return monetary value per se.

I would recommend that you get very clear on moving from your urban life to rural life and how you will fit in.

Remember, life is quite different in the rural setting. What do you plan to do in your retirement to avoid idleness, boredom and to have a sense of economic gain and usefulness?

If you have a family, whats their opinion on such a move? Discuss these things beforehand. Remember, you are at that age bracket where you cannot afford to make too many financial and social mistakes.