Common Money Issues Kenyan Youth Face and How to Overcome Them

Everybody faces financial challenges at some point in life. Kenyan youth, in particular, have their fair share, ranging from employment, job security, to managing student debt and mobile loans to gambling and lack of enough savings to invest or start a business. 

However, there is almost always an escape route that can help you feel less stressed. Here are some of the common issues that Kenyan youth face and how you can overcome them. 

#1 Being Unemployed

Every year, approximately 500,000 young people graduate from various tertiary institutions in Kenya, ready to enter the workforce.

However, due to slow growth in the economy, corruption, nepotism, and the prevailing mismatch between taught skills and industry needs, around 75% end up unemployed.

In fact, a British Council-funded study in 2017 found that it took a university graduate in Kenya an average of 5 years to get a job. 

The possibility of remaining jobless for many years after graduation is something that every student in Kenya is wary of. 

How can You Overcome this?

You can confront this challenge by thinking outside the box. Can you do a side job or create an alternative source of income with something you're good at? Then go for it!

If you are in college right now, getting some work experience, experimenting with entrepreneurship, learning extra in-demand skills, and practicing networking can get you several steps closer to defeating unemployment even before graduating. 

#2 Having a Low Income

Kenya National Bureau of Statistics (KNBS) data shows that nearly 50% of Kenyans earn below Ksh30,000.

Will I earn a good income? What happens if the salary I’m offered is not what I expected? 

The real question is; how much money would be sufficient for you? The answer is that it varies depending on the individual's personal needs and wants, and financial habits. 

Most people's finances are normally stretched the most at the start of their career, and can, in turn, affect their ability to meet basic needs such as housing and food.

How can You Overcome this?

As a young person, you should be aware of your basic needs and devote a large portion of your earnings to meeting them. If your income is insufficient to meet your basic needs, you could consider looking for a side hustle or freelance job to get extra income.

You could even scale back on your lifestyle choices, such as eating out and "party after party" every weekend. Another important thing is to also adequately budget your monthly costs and look for ways to save money.

#3 Repaying Student Loans and Other Personal/mobile Loans

In an era when an undergraduate degree no longer appears to be sufficient in many disciplines, student loans, and mobile app loans have become one of the most significant challenges that many young people have to deal with.

There's just so much pressure to go to university or college only to come out and compete for limited jobs. Many students are taking out loans to finance their education and in most cases struggle to pay them due to either lack of employment or low salaries.

How can You Overcome this?

There is no clear answer to getting out of debt, but there are measures and steps that can be taken to alleviate your concerns.

First and foremost, try to avoid taking out new loans if the repayments are likely to put a burden on your capacity to pay off existing debts. 

For student loans, consider contacting the loan providers or visiting their offices to try and figure out a repayment plan as you are still planning yourself. 

#4 Losing A Job

Unless you own your own business, there will always be the possibility of being out of work. Nearly every day, people get fired or laid off from their jobs. Many young people aren't financially prepared to be unemployed.

According to studies, many people are "liquid asset poor," which means that they don't have enough savings in their accounts to cover their expenses for at least three or more months if they lose their job.

In Kenya, unemployment levels are very high, so competition is stiff. Hence this fear is always cemented with the fact that one may have difficulty getting another job.

How can You Overcome this?

The first step in overcoming the issue of losing your job is to create an emergency fund to cover you for at least 3-6 months (or more) job loss occurs.

Participate in professional development opportunities and conferences to expand your skills and knowledge in your profession. Whenever possible, take full advantage of networking events and opportunities. Examine your CV to ensure it is up-to-date just in case a new job offer comes knocking.

Consider also generating multiple streams of income whilst you're working. If you've considered starting a business or purchasing a rental property, the income you earn will help to alleviate the strain you'll experience if you lose your job.

#5 Having to Financially Support their Parents

Black tax is a harsh reality in this part of the world whether one is employed or unemployed.

Many young people face the challenge of taking care of their parents' financial needs when they aren't even financially stable yet.

How can You Overcome this?

Talking to your parents about their finances and your financial capability is the first step toward overcoming this challenge. What can you realistically contribute to your parent’s monthly budget?

Remember, every decision you make will affect your and their financial circumstance.

WRAPPING UP

To overcome the challenges they face, today's youths should educate themselves about personal finance, work towards managing their existing student loans, reduce or prevent additional debt, learn some basic investment skills, and be willing to advance their trajectories. 

Also, one step at a time, patience pays.

Finally, do not compare yourself to your peers who may be better off financially than you. This could cause you unnecessary stress.