As we continue with the series on women and money, let’s look at how you can create a budget that works for you. You can read the previous articles in this series by clicking the following links: What Are Your Money Habits and How To Figure Out Your Money Leaks.

Last week, we looked at the different ways money gets away from you. Today, let’s start off the process of planning for the future. It’s easy to talk about planning, but harder to put plans in place when you don’t already know how much you spend per month and what your financial goals are.

And so it makes sense to take another step and create a spending plan, otherwise known as a budget, and decide where your money will go from now on.

I must admit that I was never fond of the word budget and always felt as if using one would limit my life in unnecessary ways. That mentality shifted when I tracked how I had spent money over a 90-day period and identified lots of places where I was losing money.

There are many online tools to help you develop and manage a budget so I won’t go there. What I’ll show you is a very simple way of finding out what you need to budget for.

Creating a budget that suits your needs

  1. Identify your money leaks and put them in general categories (see last week’s article).
  2. Create your budget: To start off, calculate the percentage amount for every category by dividing each category’s total by the grand total and multiplying the result by 100. For example if the total money spent last month was 40,000/- and the total for groceries was 10,000/-, then groceries account for 25% of your expenditure ((10,000 ÷ 40,000) x 100). Allocate the remaining money as per their percentages and stick to this plan. Keep money for groceries, fuel, and beauty in envelopes and once you finish the money in the envelope, either borrow from another envelope or do without spending any more in that category for the rest of the month.  Remember to set aside money for personal spending or entertainment and not to under-allocate the groceries category.
  3. Prioritize savings: Savings should be the first item on your budget. Ideally, you should save 10-20% of your income each month. The older you are when starting to save, the more money you should set aside. If this is the first time you’re saving and you’re feeling overwhelmed, start with whatever you can afford, even as little as 1%. Do this for a few months and then increase to 2%. Continue increasing the amount every 1-2 months until you’re able to save 10% or more of your income each month. Send your savings to a bank account that’s not easily accessible as soon as you receive your income or set up a standing order if your salary goes into a bank account. MPESA can help as you can send money from MPESA to most banks using the PayBill option.


  • One of the key savings accounts to build up is your emergency fund, which should contain enough money to take care of your needs for 3-6 months. I found it more feasible to create my emergency fund with a Money Market account in one of the credible financial institutions because that gives more interest than a bank account and you can still access your money in an emergency.
  • An easy way to get started on the habit of saving is to set up an M-Shwari lock account and deposit money there on a daily or weekly basis. The good thing with this account is that the money is not accessible until the account matures. When the account matures, send the accumulated sum directly to your savings account.
  1. Follow your budget for one month and make adjustments to it, but do not adjust your savings downwards! Use the adjusted budget for 3 months and then adjust your spending downwards while increasing the savings amount until you are saving at least 20% of your income per month.
  2. Find opportunities to increase your savings: If you’re lucky to get bonuses, a 13th salary, or chama money, put as much of this money as you can into your savings. And as you get salary increments, avoid the Kenyan culture of expenditure going up with income and save as much as you can. Don’t be tempted to move into a new and more expensive neighbourhood or buy the latest cars and gadgets each time you get extra money. Learn to first put some aside for the future and then spend the rest. Also take advantage of savings made from fuel, lunch (e.g. if you carry lunch to work), groceries, etc and deposit these little sums into your savings account. It may seem little as you’re depositing, but it grows into something substantial with time.
  3. Keep track: There’s no need of doing all this work and then keeping the plan aside. Keep track of your spending on a monthly, quarterly and yearly basis. For best results, evaluate each month’s spending vs the plan you’d created so that you can see how well (or poorly) you’re doing. Don’t be afraid to make mistakes or fall off your plan. When you do fall off, pick yourself up and start from where you are. However, if you find that you keep overspending on some categories, then it means that you need to readjust your figures for those categories and if possible, find an extra source of income if your current income is not enough to cater for your needs.

Final words

The biggest challenge in money management is sticking to your budget once you’ve created it. This is a learned skill and it takes time to get good at it so be patient and learn one month at a time. It also helps to keep in mind that the personal money habits you’re implementing will spill over positively into your business.

Do you have any thoughts about this plan or other budgeting experiences that have worked or not worked for you? Please share this with us in the Comments section below.

Image credit: Stuart Miles  


You can read the other articles in this series here:

Part 1: What Are Your Money Habits?

Part 2: How to Figure Out Your Money Leaks

Part 4: Women, Money and Relationships

Caroline Gikonyo
Caroline Gikonyo

Caroline Gikonyo is a Life and Business Coach at Biashara 360. She's an avid blogger and also oversees our content creation. This ensures that we give our readers quality and well researched information and tips.

Please share your Comments below