Abacus Wealth Management

Wekesa’s Pay Day

Wekesa, a plumber, was recently contracted to install piping for an apartment and earned himself KES 15,000. This is the highest he has earned in a while, and like many Kenyans, this was how he spent the money.

First, he decides to reward himself for his hard work, so he passes by the local pub and orders several rounds of Tusker baridi, a switch from his usual brew,Busaa. A few friends join in and he buys them 2 rounds each, and by the end of the night he has spent around KES 1,500.

Back at home he remembers he has not had meat in his house for the past 3 months so he sends his son to the butchery to buy half a kilogram of meat. This becomes the trend in Wafula’s house while his recently gained wealth lasts.

The weekend comes and Wekesa decides to treat his family for a day out at Uhuru Park. They enjoy a boat ride then later chicken and chips at Kenchic. Roughly he ends up spending close to KES 2,000.

Also worth mentioning is that Wekesa spent about KES 2,500 on his wife, he got her hair done and bought her a few clothes. ‘Watajuaje mzee amelipwa’ (how will they know that Wafula has been paid) if the wife isn’t pampered?

He still has some money remaining, so he decides to go visit his mother in Western Province. He surely can’t go empty handed so he passes by the supermarket and spends about KES 3,000. The transport to and from Western will cost him about KES 1,400.

Having come from the city, everyone looks up to him so he has to leave them something small before returning to Nairobi.

Before he knows it, Wekesa has spent all he had and is left penniless again. The vicious cycle of poverty starts all over again and Wekesa soon finds himself having to wait for another contract. Wekesa here becomes not just a victim of poverty’s vicious cycle, but also of  lifestyle inflation.

Sad to note, Wekesa isn’t the only person to have succumbed to lifestyle inflation. What you were once content with as comfortable lifestyle appears to be insufficient when a little bit of extra money comes your way. A neighbourhood you once considered safe suddenly becomes unsafe when you get a pay rise. New money leaves you excited,  driving you to spending money aimlessly without thinking about tomorrow.

The biggest enemy of savings is lifestyle. Money that should have gone into savings is instead used to support your new lifestyle, one that is very expensive. We tend to forget the old saying that goes: “If you didn’t need the money before, you don’t need it now.”

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