Greetings, and welcome to the 39th edition of the Wallet Wellness Newsletter - your midweek source of practical financial tips to elevate your money management skills!

We hope you got a chance to read last week’s edition, where we discussed why we self-sabotage our financial goals and how to stop. This week, we shift gears to how to rebuild your budget after back-to-school expenses.

As always, be sure to check out the Concept Corner below for a deep dive into the money concept of the week.

Let’s dive in!

MONEY254 TIP OF THE WEEK

How to Rebuild Your Budget After Back-to-School Expenses

For many Kenyan families, September means school fees, uniforms, books, transport costs, and boarding requirements. By the time kids are settled, wallets are stretched, and budgets feel broken.

But just because your finances took a hit doesn't mean you can't get back on track. Rebuilding your budget is a necessary step to regain financial control and set yourself up for the rest of the year. Here are the steps to follow.

Step 1: Conduct a Financial Post-Mortem 

Before you can fix your budget, you need to understand the damage. Take an honest look at your spending over the past month.

• Go through your bank statements, M-Pesa transactions, and receipts. Categorize every expense: how much went to school fees, uniforms, supplies, and how much was spent on non-essentials during the back-to-school chaos?

• Determine exactly how much you overspent. Was it Ksh10,000? Ksh20,000? Knowing the exact figure is the first step toward creating a realistic recovery plan.

• Identify what caused you to go over budget? Was it last-minute uniform shopping? What is the cost of transport to different shops? Understanding your triggers will help you plan better for the next school term.

Step 2: Create a Recovery Budget 

A standard budget won't work in this situation. You need a short-term, aggressive budget to help you recover.

• Cut back on non-essentials: For the next one or two months, significantly reduce or temporarily eliminate discretionary spending. This means no eating out, no new clothes, and fewer trips to the salon. For example, the Ksh5,000 you normally spend on entertainment can be redirected to cover the deficit.

• Prioritize debt repayment: If you took a mobile loan to cover school expenses, prioritize paying it off as quickly as possible. The interest you save will be a huge boost to your recovery efforts.

Step 3: Replenish Your Savings and Emergency Fund

The back-to-school period often depletes savings or an emergency fund. Your priority should be to rebuild this financial safety net.

• Automate your savings: As soon as your salary comes in, set up a standing order to automatically transfer a specific amount to your savings account. This ensures you're paying yourself first, even as you're in a recovery phase.

• Earn extra income: If you have any side hustles or opportunities for overtime, dedicate that extra income to replenishing your emergency fund. This will help you get back on your feet faster.

• Learn from the experience: Use this experience to start saving for the next school term early. By setting aside a small amount each month, like Ksh2,000, you can have a substantial fund ready for the next back-to-school season without derailing your budget again.

Final Thought

Back-to-school doesn’t have to mean back to square one. With a few adjustments, you can smooth out the bumps, avoid panic borrowing, and enter October with more control.

Remember: the best time to start preparing for school fees isn’t January,  it’s now.

CONCEPT CORNER

Bear Market

A bear market in the stock market is a period when share prices fall by 20% or more over an extended time, often lasting months or even years. It reflects declining investor confidence, where many people sell off their shares out of fear of further losses. Read more. 

Money Tips & Career Advice

MONEY254 #MONEYTOK

She Saw Her Friend’s Bank Account and Her Life Changed

Ever looked at a friend’s life and wondered, "What am I doing wrong?" For Adhiambo, that moment came when she realized her friend, who was earning the same salary, was living debt-free and earning passive income. Instead of feeling discouraged, she used that comparison as motivation to change her financial habits.

This is what’s called upward social comparison, and when used correctly, it can be a powerful tool for growth. In this video, we explore how comparing yourself to others doesn’t always have to lead to stress or debt. Sometimes, it can be the wake-up call you need to start building real financial freedom.

@money254hq

𝐒𝐡𝐞 𝐒𝐚𝐰 𝐇𝐞𝐫 𝐅𝐫𝐢𝐞𝐧𝐝’𝐬 𝐁𝐚𝐧𝐤 𝐀𝐜𝐜𝐨𝐮𝐧𝐭 𝐚𝐧𝐝 𝐇𝐞𝐫 𝐋𝐢𝐟𝐞 𝐂𝐡𝐚𝐧𝐠𝐞𝐝 Ever looked at a friend’s life and wondered, "What am I doing wrong?" For Adhiambo,... See more

That's it for this edition of Wallet Wellness. We hope these financial tips have added some energy to your hustle. Stay tuned for more practical insights in our next edition of "Wallet Wellness" next week, and watch out for Money Weekly in your inbox this Friday.

Also, don’t forget to download the Money254 App on the Google Play Store, and remember that we can help you compare over 300 loans, savings accounts, current accounts, and more if you’re thinking about your next product.

Cheers to your wallet's well-being!

Money254 editorial team.