Greetings, and welcome to the 31st 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 the five pillars of a good budget. This week, we shift gears to helping you create a savings culture using the 1% rule.

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

The 1% Rule That Can Help You Turn Your Salary into Savings

Kevin earns a steady income. Every month, his salary lands in his bank account like clockwork. Rent, food, transport, chama contributions — all accounted for.

But somehow, despite all the discipline, Kevin has been having difficulty adopting a savings culture. This has affected his plans for investments and making financial progress.

Turns out, he was making a common mistake — waiting to save what’s “left over.”

The 1% rule flips that script. It says: instead of waiting to save what remains, start by putting away just 1% of your salary — first. It’s a mindset shift. And in Kenya’s harsh economic reality, it's a gentle but powerful start.

Why 1% Works — Even When It Feels Small
Most people think “saving” means putting away Ksh5,000 or Ksh50,000. That sounds impossible when you’ve got school fees, rent hikes, and shopping when schools close. But saving 1% feels doable.

Practical Example: If your salary is Ksh100,000, 1% is just Ksh1,000. That’s less than your monthly data bundle or Wi-Fi payments.

And here’s the kicker: once you start saving 1%, you’re more likely to move to 2%, 5%, even 10% — because the habit, not the amount, is what builds wealth.

How to Apply the 1% Rule in Kenya

1. Automate it: Set up a standing order to send 1% of your income to a separate savings or money market account the moment your salary hits.
   

2. Visualize the Goal: Saving for what? A holiday in Diani? A land deposit in Juja? That purpose makes it easier to commit.
   

3. Stack It with Side Hustles: Earn extra? Apply the same rule — save 1% of your side income too.

From 1% to Financial Control
Kevin’s story changed the day he started small. His first 1% — Ksh700 — felt like nothing. But it taught him to pay himself first. Soon, he was doing 5%, then opened a Money Market Fund, and then began investing in government bonds.

What began as a small percentage became a new financial identity: one that prioritizes saving before spending.

Final Thought
Kenya’s economy is unpredictable. Prices rise, bills grow, and emergencies pop up. But the 1% rule is steady, doable, and powerful. Start small. Build the habit. And before long, that 1% could be the seed that grows into the financial freedom you’ve always wanted.

CONCEPT CORNER

Coupon Rate

The coupon rate is the fixed annual interest rate that a bond issuer promises to pay to the bondholder. It's expressed as a percentage of the bond's face value. This rate determines the amount of regular interest payments (coupon payments) the investor will receive over the bond's life. Read on. 

Money Tips & Career Advice

MONEY254 #MONEYTOK

What is a Sinking Fund & How Does It Help You Build Wealth?

Heard of a sinking fund? It's money set aside for a specific goal like a car, school fees, or a trip — different from emergency or general savings. It helps you plan ahead, avoid financial stress, and stay on track.

To start one: set a goal, pick a timeline, budget for it, and save in an MMF or SACCO.

@money254hq

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐚 𝐒𝐢𝐧𝐤𝐢𝐧𝐠 𝐅𝐮𝐧𝐝 & 𝐇𝐨𝐰 𝐃𝐨𝐞𝐬 𝐢𝐭 𝐇𝐞𝐥𝐩 𝐘𝐨𝐮 𝐁𝐮𝐢𝐥𝐝 𝐖𝐞𝐚𝐥𝐭𝐡? Heard of a sinking fund? It's money set aside for a specific goal like a car, ... 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.