I was recently listening to Morgan Housel, author of The Psychology of Money, responding to a question we all wrestle with at some point: "How should I save?"
His answer, while not revolutionary, carried the kind of clarity and simplicity we should bring to every meaningful aspect of our lives. He said: Before you worry about how to save, get really clear on why you're saving in the first place.
I’ve believed this for a while and preached it often (if you’ve been within earshot of me long enough, you’ve probably heard the sermon. My daughters certainly have). You must start with your why.
I’m an ardent student of Simon Sinek, and he’s right. Most of us approach saving the same way we approach religion: as a fear-based act. We save out of fear of the future. Fear of poverty. Fear of unexpected bills. Fear of disappointing our mothers. It’s all fear-based.
But here’s the irony: that same fear is what makes most people delay saving. Because the future? It always feels just out of reach. Distant. Tomorrow never really comes.
So let me ask you, what’s your why?
Why do you need a financial backup? A strategy? For me, it’s independence. You might prefer the word freedom. The freedom to choose the work I do, and when I do it. The freedom to decide where I live, how I raise my kids, and what I say yes or no to. That’s what I’m saving for.
Your why could be different. Maybe it's your children, your parents, your spouse, or your future self. Maybe it’s all of the above. Whatever it is, find it, name it, own it. Because without a clear why, the how will always feel complicated.
So, how should you save?
Again, Morgan nailed it: “You’re better off saving in an average way for an above-average amount of time.”
Let that sink in.
You don’t need to hit jackpots. You don’t need the perfect investment. What you need is time and consistency. The magic of compound interest doesn’t need big numbers, it needs patience. You don’t need to figure out the Kitengela plot vs mutual fund vs Sacco shares debate in one sitting. What matters more is that you keep saving and give your savings enough time to work.
Here are a few practical tools to get you started:
Money market funds:
Think of these as the responsible cousin in your financial family. Not flashy, but dependable.
MMFs pool your money with other investors and lend it short-term to governments, banks and corporations. In return, you earn monthly compound interest and yes, you can withdraw quickly when life inevitably throws a surprise (like your car battery dying the day after payday). Bonus: Most beat inflation. Your money doesn’t just sit, it moves, albeit politely.
Sacco savings
The OG of disciplined saving in Kenya. You lock in a set amount every month (often painfully), and over time it adds up. The real magic? You unlock access to low-interest loans, typically at three times your savings. Need to top up for land in Kikopey or fund your side hustle? A Sacco loan is your friend. And if you’re in a solid Sacco, those year-end dividends feel like a surprise salary, one your HR can’t touch.
Mutual funds
Mutual funds are what you go for when you want your money to multitask. You pool funds with others and professionals do the hard work, buying a mix of shares, bonds and other assets. Choose income funds for regular payouts or growth funds if you're okay waiting a few years for bigger returns. Either way, it’s the “I’m working but my money is also working” strategy. Passive income at its finest, and my personal favourite.
Government bonds and treasury bills
You lend the government money, and they have to pay you back (unless the country collapses, in which case, we all have bigger problems). Treasury bills (T-bills) = short-term, usually under a year. Bonds = long-term, five years and above. Kenya’s government has an insatiable appetite for borrowing, why not take advantage? These offer predictable returns and relative safety. Reinvest consistently, and they become the tortoise that beats the hare in your portfolio.
What I didn't mention
Crypto. Gold. Pyramid schemes. It’s not that all of them (except the last) are inherently bad. It’s that they’re often wrapped in a quick-fix mentality, the seductive promise of skipping the process.
But here’s the truth: Building wealth is like farming. You plant, you water, you wait. You don’t rush it. You don’t skip steps. It’s slow. It’s intentional. It’s yours.
So whatever tool you choose, match it to your why, then let it cook. Slowly. The goal isn’t to flip your life in a weekend. It’s to build a structure that holds you for years to come. Be consistent. Be patient. Be clear on what you're working toward. Because saving isn’t just about emergencies or retirement. It’s about buying yourself options. And options, my friend, are the real definition of wealth. They give you freedom, flexibility and the power to choose your next move, not just react to it.
Start with your why. Then, build the how.
