Personal Budgeting Plan
How to Start Putting Together a Personal Budgeting Plan
Make your money go further by creating a budget - and sticking to it.
Right after payday, many Kenyan parents flock to supermarkets for their big monthly shop. Lugging around heavy trolleys, they tick off items on a shopping list, compare brands, buy in bulk to save, and stock up on offers. They tell the kids “we don’t need more sweets or another toy today.”
These shoppers might be onto something. If done right, they’re following a budget that suits their lifestyle, meets their needs, and helps keep their finances healthy.
The good news? You can do the same - by creating your own personal budget to make money management easier.
Why is Budgeting Important?
There are several advantages to building and maintaining a budget:
You know where your money is going
You have control over your spending and saving
You can cut out unnecessary expenses and redirect that money toward meaningful goals
How to Begin Your Budgeting Process
Start by tracking every shilling you spend. The easiest way to do this is by using a budgeting tool, which helps you record your income and expenses.
Next, group your spending into two categories:
Fixed Expenses
These are regular and mostly unchanging. Examples include:
Utility bills
Rent or mortgage payments
Insurance
Loan repayments
Bank charges
Variable Expenses
These can change from month to month. Examples include:
Groceries
Personal care items
Data and airtime
Transport
Fuel
Entertainment
Subtract your total monthly expenses from your net income (your income after tax and other deductions).
Whatever is left should be directed toward your financial goals.
Set Clear Financial Goals
Having goals gives your budget purpose. Examples:
Short-term goals (achievable in less than a year): Buying a fridge, clearing mobile loan debt
Long-term goals: Saving for a home deposit, planning for retirement
Once you’ve defined your goals, account for the savings required to meet them.
Find a Formula That Works for You
One well-known method is the 50-30-20 rule:
·50% of your budget → essential (fixed) expenses
·30% → variable costs (your flexible spending)
·20% → savings and debt repayment
Helpful Tips to Stay on Track
Avoid impulse spending. Stick to your list.
Use only your bank’s ATMs to reduce withdrawal fees.
Withdraw a fixed cash amount each month to help you stay within your limit.
Always save, even while paying off debt.
Aim to build an emergency fund that covers 3 to 6 months of living expenses.
Review your budget regularly to reflect lifestyle or income changes.
Don't overcut. If you remove all entertainment or treats, it’ll be harder to maintain.
Need Help with Budgeting?
If creating or adjusting your budget feels overwhelming, our friendly financial advisers are here to support you. You can opt for a phone consultation or a face-to-face discussion—whatever works best for you. Emails us on foundation@oldmutual.co.ke. and we shall connect you with a qualified financial expert.
