Kiss 100 presenter Felix Odiwuor alias Jalang’o revealed this past week that his first job working at Kiss100 paid him 40k.
The mega-talented radio personality went on to explain how he had used the money, saying, “You click (on the ATM) and you see Sh40,000! Nilitoa Sh2,000 kwanza nikaenda Mc Frys, called Otoyo and told him I’ll buy him chicken."
Adding, “I changed my bed and upgraded my TV from Aucma to Sony. I think it was Sh18,000 to Sh20,000,” Jalang’o recalled.
The way he spent his money got me thinking. Did he use his money the right way? What!? I know! I know! "You shouldn't pocket watch," I hear you say.
But while that might be true, hear me out. There are some simple guidelines in life that can help people better handle their money no matter how much they earn.
One of the standard rules according to financial experts is that when renting an apartment or house, it's important to follow the 30% rule.
And what's that? It is the rule of thumb for rent that dictates spending no more than 30% of your gross monthly income on housing each month.
The reasoning is simple, if you follow the 30% rule, you'll still have plenty of money left to cover other living expenses and to work toward your financial goals.
The rule started back in the 1930s, specifically through the American National Housing Act of 1937. There are however two major flaws with the rule and they are;
- It doesn't account for inflation, income stagnation, or rising rent prices.
- It's not personalized to your situation, not taking into account things like loans you have taken, how much you earn, income tax, or the rental property prices in the market.
Another rule one can use is the 50/30/20 Rule which one can decide to follow instead of the one described above. This method states that a person should spend:
- 50% of income on necessities, or “needs”
- 30% of income on "wants"
- 20% of income on savings and debt repayment
At the end of the day, you alone know how your financial situation is. No one can authoritatively tell you how to use your money but one of the above solutions can be a great starting point.