Thursday, December 06, 2007

Urban Living Expenses

Continuing on the expense tracker series, as well as writing on urban inflation and spending. index

After trying various online expense tools, I fell back and used Microsoft Excel to track expenses by a simple spreadsheet. It's easier because I can work offline to add entries unlike the online offerings - and so far I have five months of data, tracking discretionary spending. These are payments made voluntarily – not statutory ones like taxes, pension, loan repayments of which I have no control.

The numbers

less than 1 %

- other expenses0%: These are various uncategorized or one off expenses that don't full into any category

- Bank charges 0%:There are actually higher but since I am on a flat rate account plan, only pesa point charges appear on the radar.

Recreation 1%: Very low, but I have avoided the golf course so far this year

Education 1%:only registration fees for 2008 and will be much higher next year

Personal 1%: haircuts etc.

Repair 1%: no car service done yet owing to very low mileage over the period (more on that later)

Clothing 1%: Men don't shop for clothes, but this will actual be proved incorrect later

Newspaper 2% - shockingly high. When you realize that you've spent a few thousand shillings on newspapers in just 5 months, the daily habit of reading newspapers seems rather expensive, for information that is available through so many other means.

Communications 3%: Again, men are different than women I'd argue and our Safaricom/celtel costs are much less for men than women in the same occupation. In fact a typical bill airtime unit will be spent as follows 50% text messages, 25% phone calls, 25% phone Internet browsing & e-mail). Cyber cafe charges also fall under this category.

Groceries 3% : rather high considering that groceries/food are not in my docket.

Electronics 3% one off purchases

Utilities 3%: water, electricity can remain low if you know what to look out for and understand/adjust your habits.

Investments 5%: The figure is much higher but this only captures discretionary, not automatic investments and share repurchases.

Dining 7%: like with newspapers, another shocker, because a lot of it is so unnecessary and could be easily avoided and should be reduced.

Drinks7% The reason EABL will over time make more money than Safaricom, and why you should buy more shares. So much of our social life, and networking in Kenya is fueled by a round of drinks.

Co-related expenses

Transport: Early on in the first month i realized that car parking was going to be a major unnecessary expense, while driving to work was sometimes inconvenient (leave early & return late or sit in traffic with 100,000 other cars ) - so i chose to use public transport more - and relax, read, watch music videos etc. and leave the driving headach to others. Also with the increasing cost of petrol (89 shillings [$1.40 ]per litre this week) this week, and with further increases expected, driving is an evening and weekend activity. The low mileage means no car service incurred, despite pestering calls from the garage/mechanic. Results are over the months are Parking 2%, Transport 4% (matatu/citi hoppa/KBS – but also some holiday travel) and Fuel 7% .

Relatives: men don't shop for themselves, but adding up the cost of giving in cash and kind tends to others can add up - and I had no idea it would be this high. Gifts 2%, Charity 4% and Family 5% means 11% is going out - mostly to relatives.

Rent 39% : You could argue that this is not discretionary, but it is and shows why i can't afford a mortgage now, which will cost about another 20% of my funds.

Off to next year, and to capture increased education and recreation expenses some things will have to cut back.

Job offer
From a job with Cisco Systems as a Global System Integrator Channel Account Manager in Nairobi.


DMX said...

Hi Banks

I keep track of my expenses using an excel spreadsheet and have done so for years. It gives me daily, weekly, monthly and annual totals and the accompanying percentages.

It is very sobering, but good for the soul. Though I do break off every now and then

A couple of comments: 1. Your total travel costs amount to 13% of your income, how much less is that than before when you flew about town in your hotrod.
2.When your rent costs 40% of your income then you really need to get a mortgage, though they will not let you pay that much of your income on monthly payments.

Thanks for sharing

MainaT said...

Banks, I was shocked that rent eats some much cash. I guess the sooner they can bring longer-term mortage products and drop interest rates the sooner Kenyans can think of owning houses.

bankelele said...

DMX: Excel is the best, and really that what spreadsheets were investnted for. sobering!

Travel costs included holiday travel, so it should be about 1/3 from before I cut back on driving. Besides teh financil cost of driving, the hassle of Nairo traffic is priceless if you can avoid it altogether
- the 40% housing is a figure of disposable cash drawn from ATM, not a % of gross. still a mortgage will be pricey (I've checked)

MainaT: rents are expensive, mortgage even more. I guess builing is the only way so we look forward to see what Housing Finance and Equity will bring to the table.

coldtusker said...

Loan Repayments could (should?) be discretionary...

Take 2 guys with the same income & assets on Day 0...

- John decides to buy a car (500,000) on Hire Purchase with a down payment of 100,000 then invests the rest (400,000)...

- Sam buys the car (500,000) using cash...

Therefore John's loan is a choice thus discretionary.

If you were to compare apples to apples then the "investment" would not be considered discretionary spending but a " discretionary investment"...

Banks... are you thinking cashflow?

bankelele said...

Coldtusker: I'd only consider a credit card a discretionary loan. Once you commit to a 3 year bank loan, you can't make day to day alterations - repayments have to be honored

Kenyan Entrepreneur said...


You say education costs are going to go up considerably next year (I'm assuming you already have your first degree and are taking graduate level courses)do you think getting another degree or taking extra courses will substantially increase your income?

I'm curious what you'll be studying? Please don't tell me English literature or I'm going to start sobbing.

Ben said...

Hello, I am interested in talking to you about your writting. so please send your cantact and I will call you. you can reach me at Thanx alot, Bernard


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