The Challenge of Managing Finances During Special Occasions
One of the biggest challenges during special occasions like birthdays or holidays is the lack of sufficient resources to purchase gifts or other items that can make the event memorable. This issue has become increasingly significant in recent years, especially in Kenya, where the high cost of living has placed a heavy burden on many households.
Over the past five years, Kenyan families have struggled to keep up with rising expenses, making it difficult to manage their finances effectively. This situation has led to a decline in the country’s saving culture, which now lags behind regional neighbors such as Tanzania, Rwanda, and Uganda, whose average saving rates exceed 20 percent. In contrast, Kenya’s average saving rate is between 10 and 14 percent.
As festive seasons approach, it becomes even more crucial for households to plan ahead. Saving in advance can be an effective way to cope with the high cost of living, especially when disposable incomes are shrinking. Financial experts emphasize that early planning helps avoid financial stress and prevents debt accumulation. According to data from the Financial Sector Deepening Kenya (FSD), debt accounts for 52 percent of household revenue in Kenya.
Automated Savings: A Smart Strategy
Samuel Njuguna, founder of Chumz app, highlights that one of the most effective ways to save for special occasions is through automation. “You can automate your savings by using mobile-based savings applications designed to help users save money through goal-based and behavioral nudges,” he explains.
The Chumz app, licensed in 2022 by the Capital Markets Authority, allows users to start saving with as little as five shillings. The platform enables users to set specific goals, such as “Christmas 2025,” and define a target amount and redemption date.
“The app uses behavioral psychology, gamification, and customizable tools to help you track and save gradually toward your goal,” says Njuguna.
Users can link their M-Pesa account and set up automated savings triggers, such as saving a small amount daily or weekly, saving a percentage every time they receive money in M-Pesa, or rounding up transactions and saving the spare change. The app also sends nudges and reminders when users spend money, encouraging them to save instead of spending impulsively—especially useful during the December shopping rush.
“Users can also lock the Christmas goal so that they don’t withdraw the money until December, preventing premature spending,” adds Njuguna.
Preparing for School Fees
After the Christmas holidays, many families face another challenge: paying for school fees during the January back-to-school season. Just like for Christmas, the Chumz app allows users to create a goal for school fees, such as “Term 1 Fees – 2026,” with a set amount and deadline.
Saving a small amount weekly or biweekly reduces the pressure when the term starts. For example, if you save Sh500 every Friday for three months, that comes to a total of more than Sh6,000, plus interest.
“We partner with regulated financial institutions, so your savings will earn some interest while they sit in your wallet,” states Njuguna.
Key Features of the Chumz App
- Users can set specific savings goals for events like Christmas or school fees.
- The app offers automated savings triggers based on user preferences.
- Behavioral nudges encourage users to save rather than spend impulsively.
- Users can lock funds to prevent premature withdrawal.
- Savings earn interest through partnerships with regulated financial institutions.
With the right tools and strategies, managing finances during special occasions can become much more manageable, helping families avoid debt and maintain financial stability.