Are you spending more than you earn?

By Luke Kung’u

Fathom this; you are a proud employee in the best referral hospital in East and Central Africa and earning a modest income but by mid-month, you have spent almost all of the hard-earned cash.

There is an incessant need to get an extra coin to mitigate upcoming needs. You get the money and is spent in almost an instant. So you borrow more. By the end month, you are indebted front, back, right, and center; all the salary ends up paying the debts.

There is a catch to this, it is a never-ending circus and a deep debt trap. If it goes unchecked, then it will run year in and year out until the retirement stage.

How does one get out of the debt trap? Some will say a side hustle will suffice but it also comes with responsibilities and also accrues running charges as well as tax. In the worst-case scenario, mismanagement may lead to the loss of the side hustle and with it all the invested money. There are better and more definite ways of securing hard-earned income.

Fast forward, one is used to a definite daily routine, waking up, getting to work, and getting paid. Life is sweet. Wait until retirement beckons and there is little to your name.

The usual long-time routine is abruptly halted. Retirement is nigh and imminent. You have plans laid ahead. The first few days, weeks, or months are blissful. You reminisce on what a person you have been and justify the luxurious spending and soft life. As time passes by you realize that the account is dwindling and there is a need to input more.

Unfortunately, you have a lot of time to do so many things but you lack the energy and vigor to do much. Somehow life has to continue, daily expenses do not stop simply because you are a retiree.

Societal expectations are still the same, so there is a need for plan B. This ultimate plan is saving, and it has to start from day one of employment. Save as much as is necessary and according to individual goals. That income needs to be converted to wealth and in a way that one is conversant with, if not, then there will always be people offering their advice, and remember some will be aiming to swindle you.

Once you turn the income into wealth, then there is a need to safeguard it; there is no property to a dead person.

This will determine who gets what and the best way to execute this is through a will that is renewed every couple of years like five-year intervals following laid down procedures. This will ensure that the right people get the right property upon your demise.

In realization of the challenges faced by many employees, KNH staff retirement benefits scheme (DC), as well as staff superannuation scheme (DB), carried out a four days’ pension member education and retirement planning training from 14th-15th February and 16th-17th February 2023 consecutively, at the National Nurses Association of Kenya building conference hall.

The training covered topics on scheme service structure, preretirement planning, retiree life experience, personal financial management as well as estate planning.