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MONEY TALKS: 5 winning habits of managing money

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By FLORENCE BETT-KINYATTI
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One of the simplicities about money is what you can do with it: you’re either spending it, saving it or investing it. Period. The cracks of these three is where the good habits about money are.

These habits can be taught, refined and mastered over the years – you can always getter at managing your money. Always. There’s no one out there who’s not hungry to pick up yet another good habit on managing their money.

I’ve mastered a few over the years. I share with you five of them:

Making a provision is an accounting term. It even has an entire accounting standard that talks about it. (I’m a certified accountant with ACCA, that’s how I know about it.)

It simply means setting money aside in advance, for an expense you know with some certainty, will come to pass. Like, car or health insurance, NHIF, your child’s school fees.

My daughter stared school a few weeks ago (whoop, whoop) so school fees is the readiest example for a provision: because we knew she’d be going to kindergarten in January 2019, GB and I set up a separate school fees account in October, and agreed to be sending to it a small respective amount every month.

This money was to cover school fees, uniform, clubs, bus and school lunch.

So when the of life sweeps across your financial terrain, the money for necessities such as this has safely been stashed away. Now we’re beginning to save for term two, Inshallah.

Pick up this habit. If it’s car insurance, divide it by 12 months then make a commitment to set aside that amount every month. Even better if you send it to an account you can’t access.

You could also set up a direct debit or standing order to have that cash deducted at source. Even your payroll accountant can help you manage your provisions.

#2. Never put money in your hands until you’ve budgeted for it

Budgets, oh budgets. Budgets are one of those good habits we’re aware of, we really want to get done but which we never seem to get around to doing. It’s like taking our dietary supplements, our omega 3’s and multivitamins. Or going in for an annual pap smear or prostate exam. Or keeping time.

I don’t know what else to say apart from this: never – like, don’t ever – put money in your hands until you’ve budgeted for it. Be it salary, wages, side-hustle income, investment income, old debts repaid, new debts to be repaid, money you’ve borrowed…

You’d rather let it sit where it is until you’ve come up with budget to what you’ll do with it.

They always say that you must pay yourself first – i.e. save – before you begin to expense your income. Here’s the thing though, you don’t have to follow this suggestion with every shilling that comes your way – have a different budget for each stream of income. It simplifies how you manage your money and also managing the expectations you have of yourself, and of your money.

For example, budget to spend your salary, budget to save money you’ve lent out and budget to invest side-hustle income.

#3. Use your investments returns to invest further

As a freelance writer, I’m paid only for what’s published. I’m not on a salary but I receive some constant figure every month. It’s a precarious way to live but it’s taught me to be smarter, sharper and more diligent.

Sometimes it frightens me… but… more on that another day.

I’ve structured my income such that I spend my entire ‘salary’, and save and invest my side-hustle and investment income.

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Here’s an easy example, I invest with two Saccos. I receive dividend income from both annually. For one of the Saccos, I reinvest the dividends back into my Sacco savings.

For the other, I use the dividends to prepay chama contributions for the entire year. Income from my side-hustles (I have a handful) I plough back or redirect to another investment.

Unless in extreme circumstances do I use my investment income for day-to-day expenses like food and clothing. Those circumstances do arise from time to time. As is life.

I’m in my 30s now so this is the time to grow and build. The time to grow and spend will come someday soon. Probably in my 40s and 50s. I pray I’ll be around to enjoy the fruits of what I’m building now.

#4. Respect it – there’s nothing like small money

The line that separates small money from big money is so faint that it doesn’t exist for me anymore: money is money.

I have to be honest with you, though, I used to despise small money. That was until I became a freelance writer and every word I write translates to money in my pocket at the end of the month. A word for every shilling. A sweat for every coin. A story idea for every budget line.

You’ll value money more if your efforts are directly proportional to your income. Keep an eye on the small monies. How so, you ask? Well, seal the small money leaks.

For example, are you holding your cash in a bank account that’s charging you an extra Sh50 and Sh70 for services you neither need nor use? Shut the account and move to a cheaper one.

Are you sending money on M-Pesa without being aware of the Sh15 and Sh20 difference in sending brackets? For example, to send Sh5,000 costs Sh60, but when you add Sh66 ya kutoa and make it Sh5,066, then you’ll move to the next bracket and it’ll now cost you Sh75 to send.

What you can do instead, is to send that Sh5,000 then do a second transaction of Sh66 which costs you nothing. Saving that Sh15 is the small money I’m talking about here.

Then there’s the weekly shopping for fruits and vegetables. You can do your shopping like a wholesaler at Marikiti market and begin to save monthly at least Sh3,000.

And on and on it goes. If you audit your daily spending you’ll come across several of such small-money leaks. Sealing them little by little adds up to the ‘big money’ most folk give more attention to.

And it’s not being petty, it’s being smart.

#5. Be curious and hungry to engage with money

I’ve demystified money. I read on money. A lot. I’m subscribed to websites, blogs and Facebook pages about money. Magazine and newspaper columns about money call my name. If I listened to Podcasts, I’d likely be subscribed to the ones about money.

I watch YouTube videos and TV shows about money. One of my most favourites is “Shark Tank”. That show where entrepreneurs pitch their business ideas to a select panel with a hope of securing financing to further their ideas. All 10 seasons of the show at streaming on Netflix. Catch them.

Whenever I meet my pals and pals of my pals, I’m usually prying to know what they’re doing to make extra money, money outside of their employment salaries. Because it’s outside their salary where a man makes his money bones.

It’s 2019 – make this your year to be a money guru of some sort.



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Sordid tale of the bank ‘that would bribe God’

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Bank of Credit and Commerce International. August 1991. [File, Standard]

“This bank would bribe God.” These words of a former employee of the disgraced Bank of Credit and Commerce International (BCCI) sum up one of the most rotten global financial institutions.
BCCI pitched itself as a top bank for the Third World, but its spectacular collapse would reveal a web of transnational corruption and a playground for dictators, drug lords and terrorists.
It was one of the largest banks cutting across 69 countries and its aftermath would cause despair to innocent depositors, including Kenyans.
BCCI, which had $20 billion (Sh2.1 trillion in today’s exchange rate) assets globally, was revealed to have lost more than its entire capital.
The bank was founded in 1972 by the crafty Pakistani banker Agha Hasan Abedi.
He was loved in his homeland for his charitable acts but would go on to break every rule known to God and man.
In 1991, the Bank of England (BoE) froze its assets, citing large-scale fraud running for several years. This would see the bank cease operations in multiple countries. The Luxembourg-based BCCI was 77 per cent owned by the Gulf Emirate of Abu Dhabi.  
BoE investigations had unearthed laundering of drugs money, terrorism financing and the bank boasted of having high-profile customers such as Panama’s former strongman Manual Noriega as customers.
The Standard, quoting “highly placed” sources reported that Abu Dhabi ruler Sheikh Zayed Sultan would act as guarantor to protect the savings of Kenyan depositors.
The bank had five branches countrywide and panic had gripped depositors on the state of their money.
Central Bank of Kenya (CBK) would then move to appoint a manager to oversee the operations of the BCCI operations in Kenya.
It sent statements assuring depositors that their money was safe.
The Standard reported that the Sheikh would be approaching the Kenyan and other regional subsidiaries of the bank to urge them to maintain operations and assure them of his personal support.
It was said that contact between CBK and Abu Dhabi was “likely.”
This came as the British Ambassador to the UAE Graham Burton implored the gulf state to help compensate Britons, and the Indian government also took similar steps.
The collapse of BCCI was, however, not expect to badly hit the Kenyan banking system. This was during the sleazy 1990s when Kenya’s banking system was badly tested. It was the era of high graft and “political banks,” where the institutions fraudulently lent to firms belonging or connected to politicians, who were sometimes also shareholders.
And even though the impact was expected to be minimal, it was projected that a significant number of depositors would transfer funds from Asian and Arab banks to other local institutions.
“Confidence in Arab banking has taken a serious knock,” the “highly placed” source told The Standard.
BCCI didn’t go down without a fight. It accused the British government of a conspiracy to bring down the Pakistani-run bank.  The Sheikh was said to be furious and would later engage in a protracted legal battle with the British.
“It looks to us like a Western plot to eliminate a successful Muslim-run Third World Bank. We know that it often acted unethically. But that is no excuse for putting it out of business, especially as the Sultan of Abu Dhabi had agreed to a restructuring plan,” said a spokesperson for British Asians.
A CBK statement signed by then-Deputy Governor Wanjohi Murithi said it was keenly monitoring affairs of the mother bank and would go to lengths to protect Kenyan depositors.
“In this respect, the CBK has sought and obtained the assurance of the branch’s management that the interests of depositors are not put at risk by the difficulties facing the parent company and that the bank will meet any withdrawal instructions by depositors in the normal course of business,” said Mr Murithi.
CBK added that it had maintained surveillance of the local branch and was satisfied with its solvency and liquidity.
This was meant to stop Kenyans from making panic withdrawals.
For instance, armed policemen would be deployed at the bank’s Nairobi branch on Koinange Street after the bank had announced it would shut its Kenyan operations.
In Britain, thousands of businesses owned by British Asians were on the verge of financial ruin following the closure of BCCI.
Their firms held almost half of the 120,000 bank accounts registered with BCCI in Britain. 
The African Development Bank was also not spared from this mess, with the bulk of its funds deposited and BCCI and stood to lose every coin.
Criminal culture
In Britain, local authorities from Scotland to the Channel Islands are said to have lost over £100 million (Sh15.2 billion in today’s exchange rate).
The biggest puzzle remained how BCCI was allowed by BoE and other monetary regulation authorities globally to reach such levels of fraudulence.
This was despite the bank being under tight watch owing to the conviction of some of its executives on narcotics laundering charges in the US.
Coast politician, the late Shariff Nassir, would claim that five primary schools in Mombasa lost nearly Sh1 million and appealed to then Education Minister George Saitoti to help recover the savings. Then BoE Governor Robin Leigh-Pemberton condemned it as so deeply immersed in fraud that rescue or recovery – at least in Britain – was out of the question.
“The culture of the bank is criminal,” he said. The bank was revealed to have targeted the Third World and had created several “institutional devices” to promote its operations in developing countries.
These included the Third World Foundation for Social and Economic Studies, a British-registered charity.
“It allowed it to cultivate high-level contacts among international statesmen,” reported The Observer, a British newspaper.
BCCI also arranged an annual Third World lecture and a Third World prize endowment fund of about $10 million (Sh1 billion in today’s exchange rate).
Winners of the annual prize had included Nelson Mandela (1985), sir Bob Geldof (1986) and Archbishop Desmond Tutu (1989).
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Monitor water pumps remotely via your phone

Tracking and monitoring motor vehicles is not new to Kenyans. Competition to install affordable tracking devices is fierce but essential for fleet managers who receive reports online and track vehicles from the comfort of their desk.

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Agricultural Development Corporation Chief Accountant Gerald Karuga on the Spot Over Fraud –

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Gerald Karuga, the acting chief accountant at the Agricultural Development Corporation (ADC), is on the spot over fraud in land dealings.

ADC was established in 1965 through an Act of Parliament Cap 346 to facilitate the land transfer programme from European settlers to locals after Kenya gained independence.

Karuga is under fire for allegedly aiding a former powerful permanent secretary in the KANU era Benjamin Kipkulei to deprive ADC beneficiaries of their land in Naivasha.

Kahawa Tungu understands that the aggrieved parties continue to protest the injustice and are now asking the Ethics and Anti-corruption Commission (EACC) and the Directorate of Criminal Investigations (DCI) to probe Karuga.

A source who spoke to Weekly Citizen publication revealed that Managing Director Mohammed Dulle is also involved in the mess at ADC.

Read: Ministry of Agriculture Apologizes After Sending Out Tweets Portraying the President in bad light

Dulle is accused of sidelining a section of staffers in the parastatal.

The sources at ADC intimated that Karuga has been placed strategically at ADC to safeguard interests of many people who acquired the corporations’ land as “donations” from former President Daniel Arap Moi.

Despite working at ADC for many years Karuga has never been transferred, a trend that has raised eyebrows.

“Karuga has worked here for more than 30 years and unlike other senior officers in other parastatals who are transferred after promotion or moved to different ministries, for him, he has stuck here for all these years and we highly suspect that he is aiding people who were dished out with big chunks of land belonging to the corporation in different parts of the country,” said the source.

In the case of Karuga safeguarding Kipkulei’s interests, workers at the parastatals and the victims who claim to have lost their land in Naivasha revealed that during the Moi regime some senior officials used dubious means to register people as beneficiaries of land without their knowledge and later on colluded with rogue land officials at the Ministry of Lands to acquire title deeds in their names instead of those of the benefactors.

Read Also: Galana Kulalu Irrigation Scheme To Undergo Viability Test Before Being Privatised

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“We have information that Karuga has benefitted much from Kipkulei through helping him and this can be proved by the fact that since the matter of the Naivasha land began, he has been seen changing and buying high-end vehicles that many people of his rank in government can’t afford to buy or maintain,” the source added.

“He is even building a big apartment for rent in Ruiru town.”

The wealthy officer is valued at over Sh1.5 billion in prime properties and real estate.

Last month, more than 100 squatters caused scenes in Naivasha after raiding a private firm owned by Kipkulei.

The squatters, who claimed to have lived on the land for more than 40 years, were protesting take over of the land by a private developer who had allegedly bought the land from the former PS.

They pulled down a three-kilometre fence that the private developed had erected.

The squatters claimed that the former PS had not informed them that he had sold the land and that the developer was spraying harmful chemicals on the grass affecting their livestock and homes built on a section of the land.

Read Also: DP Ruto Wants NCPB And Other Agricultural Bodies Merged For Efficiency

Naivasha Deputy County Commissioner Kisilu Mutua later issued a statement warning the squatters against encroaching on Kipkuleir’s land.

“They are illegally invading private land. We shall not allow the rule of the jungle to take root,” warned Mutua.

Meanwhile, a parliamentary committee recently demanded to know identities of 10 faceless people who grabbed 30,350 acres of land belonging to the parastatal, exposing the rot at the corporation.

ADC Chairman Nick Salat, who doubles up as the KANU party Secretary-General, denied knowledge of the individuals and has asked DCI to probe the matter.

Email your news TIPS to [email protected] or WhatsApp +254708677607. You can also find us on Telegram through www.t.me/kahawatungu

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William Ruto eyes Raila Odinga Nyanza backyard

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Deputy President William Ruto will next month take his ‘hustler nation’ campaigns to his main rival, ODM leader Raila Odinga’s Nyanza backyard, in an escalation of the 2022 General Election competition.

Acrimonious fall-out

Development agenda

Won’t bear fruit

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