Yes, It’s Possible!
Want to Finish Your Dream Home in Kenya While Still Paying Off Loans? Here’s How to Do Both
You have set a powerful aim: save Sh2 million to complete building your home. However there’s a catch you’re already repaying loans, and your budget feels stretched thin. Sound familiar? You’re not alone. Many Kenyans juggle similar financial pressures, trying to balance loan repayment with long-term savings goals.
The good news? With smart financial planning, strategic budgeting, and a bit of discipline, you can build your house and beat your debt all at the same time.
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Why It’s Possible to Save Sh2m Even If You’re in Debt
Most people assume you must choose among saving and debt repayment however that’s a false choice. In fact:
- Saving builds financial resilience, particularly for construction emergencies.
- Strategic debt repayment can progress your credit and free up future borrowing power for your home.
- By tools like M-Pesa savings plans, SACCOs or hustler funds you can start small and grow consistently.
Step-by-Step: How to Save Sh2 Million While Repaying Loans
Step 1: Know Your Numbers
Make a simple financial plan breakdown:
- Monthly income: ShX
- Loan repayments: ShY
- Fixed expenses (food, rent, transport): ShZ
- Disposable income: Sh(X – Y – Z)
Tool Tip: Use a loan repayment calculator (Kenya-specific) or budget tracker apps just as Tala Safaricom’s M-Pesa app, or Chamasoft.
Step 2: Set a Time-Bound Savings Goal
Let’s say you want to save Sh2m in 3 years.
You will need:
- Sh55,555/month
- OR break it down to Sh1,850/day
Can’t manage that now? That’s OK start with what’s realistic then grow your savings over time.
Step 3: Trim the Fat Smart Budgeting Tips
Cut unnecessary costs using the 50/30/20 Rule:
- 50%: Needs (basics)
- 30%: Wants (entertainment, non-essentials)
- 20%: Savings + Debt Repayment
Well however, shift the 30% “wants” to accelerate investments.
High Impact Saving Areas in Kenya:
- Ditch daily lunch takeouts (save Sh200+ daily)
- Switch to prepaid electricity (track usage better)
- Cut costly loans; renegotiate for lower interest rates
Step 4: Rise Your Income Streams
You wonot save Sh2m by only cutting costs. Try these Kenyan friendly side hustles:
- Freelancing on Ajira Digital
- Selling digital products or crafts on Jiji or Instagram
- Renting out further space on Airbnb or as a store
Step 5: Automate Your Savings
Use M-Pesa lock savings accounts or SACCOs to deposit savings earlier you touch the money.
Pro Tip: Treat savings like a “loan repayment” to your upcoming.
Budgeting Blueprint to Help You Hit Your Sh2m Aim
| Category | Monthly Allocation |
| Loan Repayment | Sh15,000 |
| Household Expenses | Sh25,000 |
| Emergency Fund | Sh5,000 |
| Home Savings (Sh2m Goal) | Sh30,000 |
| Miscellaneous | Sh5,000 |
| Total | Sh80,000 |
Modify based on your income. Prioritize home savings as a stable monthly cost.
Real Kenyan Situation Study
“I saved Sh2.1m while refunding a Sh300k HELB loan” Nancy, Nairobi.
Nancy used table banking, reduced her entertainment budget, and joined a SACCO. She also ongoing a part-time baking business. It took 3 years, however she now lives in her own 2-bedroom home.
Expert Tips for Saving While in Debt
- Use SACCO dividends to boost annual home savings.
- Invest small amounts in low-risk unit trusts let your money grow passively.
- Consider refinancing high-interest loans via government-friendly institutions.
- Avoid new debt unless it’s strategic (e.g., home improvement SACCO loans).
Frequently Asked Questions (FAQs)
How do I start saving if my budget is already tight?
Begin with micro-saving. Even Sh100/day = Sh3,000/month. Use M-Pesa’s KCB M-Pesa or M-Shwari Lock Savings.
Should I pay off my loan first before saving?
Not necessarily. Balance both pay the minimum required on loans while directing extra income to your Sh2m aim.
Are SACCOs better than banks for saving?
For most Kenyans SACCOs offer better interest and easy loan access tied to savings making them ideal for construction goals.
Final Word: Your Dream Home Is Within Reach
The journey to saving Sh2 million while repaying loans isnot easy however it’s 100% possible. All it takes is a clear aim disciplined planning, and the courage to stay consistent.