A Beginner's Guide to Creating a Budget That Works in Kenya

Do you ever get to the middle of the month and wonder, "Where did all my money go?" You’re not alone. Juggling rent, transport, food, data bundles, and still having a little fun can feel like a constant challenge. Many people think a budget is about restriction—about saying "no" to everything you enjoy.

But here at AZIRA, we believe in a different perspective. A budget isn’t a cage; it’s a tool for freedom. It’s the first, most powerful step to taking control of your finances, reducing stress, and building the life you want. It's how we begin Growing Together.

This simple guide will walk you through creating a personal budget that works for the realities of life in Kenya.

Step 1: Know Your Income (Tally Your Total)

Before you can tell your money where to go, you need to know exactly how much is coming in each month.

• Your Salary: This is your net pay (after all deductions like NSSF and NHIF).
• Your Side Hustle: Include all income from your biashara, freelance work, or any other ventures.
• Other Income: Any other regular money you receive.

Add it all up. This total number is your starting point.

Step 2: Track Your Spending (Follow the Money)

This is the most eye-opening step. For one month, track every single shilling you spend. Be honest with yourself—no judgment!

• The Modern Way: Your M-Pesa and banking apps are your best friends here. Go through your statements and categorize each transaction.
• The Classic Way: Use a notebook (kadi) or a simple phone app to jot down every expense, from your morning coffee to your bus fare home.

Group your spending into simple categories:

• Fixed Needs (The Must-Haves): Rent, utilities (water, electricity), loan repayments, school fees.
• Variable Needs (The Essentials): Groceries, transport, airtime, and data bundles.
• Wants (The Fun Stuff): Eating out, subscriptions (Netflix), entertainment, shopping.
• Obligations & Giving: Harambee contributions, tithe, supporting family.

Step 3: The 50/30/20 Rule (The Kenyan Edition)

Now that you know what’s coming in and what’s going out, it’s time to give your money a plan. A great starting point is the 50/30/20 rule, adapted for our context.

50% for Your NEEDS

Half of your income should go towards your essential needs—the things you absolutely must pay for. This includes your rent, transport to work, groceries, and utilities. In cities like Nairobi, rent can take a big chunk, so this category requires careful management.

30% for Your WANTS

This is the money for your lifestyle. It’s for that nyama choma with friends, your DStv subscription, a new outfit, or treating yourself. This category is important for a balanced life, but it's also the first place to look when you need to cut back and save more.

20% for Your FUTURE (Savings & Debt Repayment)

This is the most crucial part. This is how you jenga maisha yako. Before you pay for anything else, aim to set aside 20% of your income. This portion is for:

• Building an Emergency Fund: For unexpected costs, so you don't have to go into debt.
• Saving for Goals: This could be for a new laptop, a down payment on land, or capital for a new business idea.
• Paying Down Debt: Clearing existing loans faster saves you money on interest.
• Investing in Yourself: Growing your future security.

Step 4: Put Your Plan into Action

Your budget is now ready. The next step is to use it.

• Open a Separate Savings Account: To make your 20% for the future untouchable, move it to a separate account as soon as you get paid. A plan like our

  AZIRA Prime Plan, which has a KSHS 100 opening balance and no monthly maintenance fee , is perfect for this.

• Review and Adjust: A budget is a living document. At the end of each month, review your spending. Did you stick to the plan? Where can you improve? If you get a salary increase, adjust your 50/30/20 amounts accordingly.

Ready to Grow?

Creating a budget is the ultimate act of self-empowerment. It’s your personal roadmap from where you are today to where you want to be tomorrow.

Once your budget shows you how much you can save, the next step is to make that money work for you. Explore our savings plans or talk to us about your financial goals.

What is your biggest budgeting challenge? Share it in the comments below!