Money trap: Why many Kenyans struggle to grow wealth

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At a time when many Kenyans are grappling with the rising cost of living, financial experts are urging the citizenry to rethink how they handle their money, saying saving alone is not enough to achieve financial freedom.

Waithaka Gatumia, the Chief Executive of Centonomy Limited, says the journey to wealth begins with a clear plan and self-awareness.

According to Gatumia, the first step is identifying what one wants to achieve financially and then creating a roadmap to get there.

"Many of us simply say we want to be rich, but we have no idea what that means for us personally," he says, adding, "We look at the highest mountain and say we want to get there, but we have no clue about the cost or effort required."

The finance expert notes that true financial planning requires three key elements: understanding income, tracking spending, and committing to saving and investing.

He explains that many people fail to build wealth because they focus only on saving without a clear plan for investing.

"Saving is good, but it will not make you wealthy," he says. "If you are only saving, you are shooting yourself in the foot," he says.

He breaks down how small daily habits can make a difference. For example, saving Sh170 a day could leave someone with Sh5,000 at the end of the month, adding up to Sh60,000 in a year.

But Gatumia cautions that without a plan to invest that money its value will be eroded over time.

One of the biggest mistakes many Kenyans make, he observes, is failing to track how they spend.

He recalls advising a friend who thought he was financially disciplined only to discover that he had unknowingly spent nearly Sh1,000 in a month on sweets and chewing gum bought in traffic.

"That is money we often don't account for, but it adds up," Gatumia says. "Many people are shocked when they write down everything they spend on for a month."

He also encourages Kenyans to look beyond their salaries and find ways to grow their income.

He argues that relying only on earned income limits financial growth because an individual can only work so many hours in a day.

Instead, the CEO advises people to find ways to make their money work for them - whether through business, investments, or partnerships.

"If I put my money in an investment someone else is working to give me a return," he says. "If I run a business my employees are working to make it grow."

Gatumia stresses that financial freedom is not about quick fixes but about discipline, consistency, and a willingness to make hard choices. "There is no mountain that cannot be climbed," he says. "But you must decide what you want and whether you are willing to pay the price."

For many Kenyans struggling to save amid high inflation and economic uncertainty, the advice may sound easier said than done.

But Gatumia believes that with a deliberate plan and clear goals, anyone can start the journey to wealth no matter how small their income may seem.