Anyone earning between 23, 000 Kenya shillings and 299, 000 Kenya shillings is considered a middle-class earner in Kenya. The middle-class people tend to live beyond what they can actually afford. This is the group of people who borrow huge loans to live an expensive lifestyle just to show off. They live in huge debts, take their children to expensive schools, drive expensive cars because this is what determines their socio-economic status. Middle-class earners increase spending as their earnings increase. This article highlights the common financial mistakes the middle-class earners in Kenya need to avoid.
Common financial mistakes the middle-class earners in Kenya should avoid
Purchasing unnecessary staffs
The middle class has the tendency of buying unnecessary stuff. Because of this, they end up spending money on things they do not need. The middle-class earners buy whatever catches their eyes whenever their salaries come in. This is a problem in Kenya because people end up selling what they need while buying what is not necessary.
Borrowing huge loans
Living in huge debts is a common characteristic of middle-class earners. These people will borrow huge loans just to buy an expensive car. Because possessions determine social class, people tend to try as much as possible to buy expensive things. You need to borrow a loan and calculate the years you’ll take to repay the loan. You need to buy something that will make a profit and not just for luxury.
Middle-class earners spend all their income and remain with nothing in their accounts. Most of these people will have nothing at all in their accounts and if there is, it is just the minimum amount required to remain in the bank account. Start saving money in your bank account because you never know when you’ll need the money and your savings will be the only option.
Relying on one particular job
Having a side hustle is an important thing but many middle-class earners take it for granted. You need to learn how to source income from different hustles and not just monthly salaries. Side hustling enables you to make savings for a better future while investing in profitable opportunities. A side job is important also for security. This is because you may lose your job and the side job will still be there to earn you something.
Living beyond their means
Middle-class people tend to live beyond their means; living a lifestyle they can hardly afford. People in this class live a life just to maintain their status quo within the society. This is where people live and dress like millionaires just to impress their members of society. The thing about living beyond one’s means is that you end living in huge debts. Middle-class people create poverty by themselves because they want to look rich by living an expensive life they cannot afford.
- The Biggest Financial Mistakes Retirees Make
- Top five financial mistakes middle earners in Kenya should avoid