Should I Join a Money Club/Round/Stokvels

Should I Join a Money Club/Round/Stokvels


I was not planning to write about money clubs/Stokvel at this juncture but a friend and fan of the blog asked me about them and I figured why not? I love money clubs, grocery clubs, building clubs, etc. They are a uniquely African solution to challenges faced by African women (I know women in other countries use them). I actually think under the right circumstances women all over the world should use them (and men too!).

Discussions about money clubs are often controversial and get very personal really quickly so I am going to focus on how you can decide if this is a good money decision for you. One of my favorite Facebook groups with over 40,000 Zimbabwean women often has some lovely & heated debates on the issue. More power to the ladies of PH and the admins who hold us all steady.

By focusing on how the clubs work I think we avoid value judgments about the system and instead strengthen good financial habits that can benefit us if we choose to join them or use other savings strategies.

What is a Money Club and How Does it Work?

Figure 1: How money clubs work

The idea behind money clubs is very simple. Members of a group come together and agree on an amount to contribute each month. A single member of the group receives the pooled funds on a monthly rotation.

Example: A Group has 6 members named 1-6

The cycle of the club runs for 6 months

Each member contributes $100 to the club for a total of $600

Each month one member is given $600 until the cycle is complete

Money clubs have a long history in most developing countries. My mom and almost all the women in our family have been part of a money club at some point. I benefited from a money club when planned our wedding – it was a lifesaver!

Saving is HARD!

I think of money clubs as savings training wheels. It is really hard to commit to setting aside 20% of your income because life happens. As women, we know this. If mom or mom in law needs something we often have to pull from our savings, if the baby needs something for school or if the church is doing a fundraiser, we often find ourselves pulling from our savings. If our money is in a money club then we can’t reach it, so we do not have to spend away from our savings on unplanned “emergencies”.

Sometimes Banks  DO NOT WORK! Between the bank fees, poor interest rates and inflation sometimes banks are not an option. Women in Zimbabwe understand this all too well. So being a member of savings club forces us to put our money in a relatively safe option. The rate of default in most money clubs is actually quite low. I have followed over 100 clubs and only 3 have had major defaults. Banks should loan more money to women!


Before you join a money club- here are some things to consider

  1. Do you have a monthly budget?
    1. Being a part of a savings club does not eliminate the need for a budget. How else will you know what type of club works for you and how much you can afford to contribute per month

You can read more about making a budget on this post

  1. If you do not have a CLEAR budget, you may end up borrowing from other needs to cover your share of the contribution or you may end up defaulting which will be bad for the club
  1. Do you have CLEAR MONEY  goals?
    1. I want to save is not enough because if you do not have clear goals when you receive that $600 windfall you will end up with idle money which now knows is not a good idea.
    2. You will need to have clear short- and long-term goals
  2. How much can I afford to lose and how much can I afford to be without
    1. Although default rates are low things do happen so you have to check your budget to determine how much money you can afford to lose
    2. Also, determine how much money you can afford to be without for the duration of the cycle – these two numbers determine the money club level that works for you.

e.g. if you earn $1,000 a month the most you can contribute to a money club is $200- the real number is likely less depending on how much you need for rent etc. My rule of thumb is that this should be 20% or less of your income. Even when you are in a money club you still need at least $500 for an emergency fund depending on your situation. A MONEY CLUB IS NOT AN EMERGENCY FUND

If you do not have a monthly budget and if you do not have CLEAR money goals, you are not ready for a money club J

Goal setting is a private conversation between you and yourself or with your partner. As with any other money issue please be honest with yourself.

Let us look at some good examples of money goals

  1. Goal – Pay or a Wedding or DOWRY ($5,000) due 12-month period
  • This is a really good reason to join a money club. Most short-term interest rates are less than 3% (at least in the US & UK) and some accounts have high fees so, in this case, putting in a bank even when possible may be frustrating.
  • Let’s say there are 5 people in the club each one contributing $500- the receivers will get $2,500 (including their contribution). Over a 12-month period, each person will receive twice
  • As soon as you receive your payout make sure to settle at least one bill towards your end goal. Pay for the wedding dresses, pay for the cake, wedding venue – take care of other big-ticket items.
  1. Goal – buy a new stove ($1000 )due in 6 months
  • This is not the type of goal where you can pre-pay unless there is a layaway option. In this case, I would join a club that paid out as close as possible to my goal. You want to avoid idle money
  1. Goal – pay expenses related to a kid going to the first year of high school ($1500) 12 months
    • This is another great example of where you can make purchases towards the end goal as you go along
    • Each time you receive a payout purchase school uniforms, notebooks, pay your tuition deposit and other related expenses
  2. Goal- pay for adult education ($2000) due in 12 months
    • In this case, you may want to use payouts to pay tuition deposit, invest in school supplies or negotiate to move places so that you receive double the amount the month you have to pay tuition.
  3. Goal – Go home for a visit (estimated cost $3,000) in 18 months
    • If you are in the diaspora – a money club could be a great way to make purchases towards your trip home. You can buy your ticket earlier and take advantage of cheaper rates. You can buy all the gifts you want to carry with you.
  4. Goal- Starting a small business ($500) in a year
    • Money clubs are great for supporting your multiple streams of income initiatives. I have been reading that Somali expats in South Africa often pull money in this way to start up small businesses. In fact, when I asked around some of my girlfriends told me that they used funds from money clubs to fund their businesses and they have reinvested profits from the business to keep the club going. This is a HUGE win for small business.
    • In my case, we used funds from our money club to help pay off debt and stock up. Eventually, we used our payout to give ourselves a bonus every 6 months.
  5. Goal- House down payment ($10,000) due in a year
    • My favorite money club story is of 10 Zimbabwean women in Texas who used the money club to pay down deposits or outright purchase their homes. Each member of the group paid in $2000 a month for a total payout of $20,000. $20,000 was the perfect number for settling their down payments or paying off the mortgage.

Take away

So, my friend – if you are deciding whether or not a money club is right for you the answer is in your budget and your long/short term goals. Once I was done paying off my debt, I decided that I no longer needed a money club and shifted my focus to direct deposits in my savings account as well as maxing my retirement benefits. Our next major goals are scheduled for 3 years from now so if I were to join a money club, I would end up with idle money which is not good for me.

Please share with me stories about your experience with money clubs-THANK YOU!!!!

DISCLAIMER: MoneyProfessor is my personal blog. I provide general information – not professional or financial advice. Opinions and representations on are my own. I am not providing financial advice or legal advice on my blog. I am only providing general information. You should consult a professional before making any financial or legal decisions.


What is the point of money? To love and to be free

I had about 30 tabs of financial blogs open on my computer when my husband asked me that question. Those of you who know him – know that he is so sweet and reserved and very thoughtful. I blabbered something about the budget then continued with my scrolling. However, over the months I have thought a great deal about why I wanted to write about money now.

I am not driven by having a huge bank balance for the sake of a huge balance, but I am interested in the freedom to love that money has given those around me. Financial freedom gives us time, access to good education and for some citizenship in places of their choice. Access to money can do good. I know – money and love in the same sentence – blasphemy!

When I was not well, I found myself surrounded by so much love and kindness and it has since occurred me that the financial cost of that love and kindness was not $0 on those who gave it. The night after my surgery I was unable to sleep. I was too scared to close my eyes. I thought if I did, I would never wake up. The thought of sleep as I watched my husband after 48 hours of caring for me finally find rest was attractive but also scary, so I stayed awake. One of my nurses came to sit with me from about 11 pm to 4 am. Over the course of the night, we shared personal stories about our lives. Then something she said struck a code in me. She had only just returned to work after having left to provide care for their baby. Financially they could not afford full-time childcare so she was working reduced hours. Since then I have read stories and spoken to health care providers who like many middle-class families can’t make ends meet. It felt unfair to me that someone who works so hard should struggle to care for their child. I felt really lucky that she had chosen to return to work and that I benefited from her care.

The following day one of my best friends came to the hospital and spent the entire day with us (We love you, Anna). That morning I also sent a text to our Pastor who was in our hospital room in what felt like minutes. I have shared this with people who responded with – well that is the job of a Pastor or friend. Perhaps, but churches do not run on water and neither do their cars. When we returned home our house was full of beautiful flowers. Our church family made a meal train and one of my very best college friends bought me the softest gentlest bedroom slippers (Thanks Kelz). There are too many people in our village who showed up for us- I will forever be grateful for your thoughtfulness.  I understood the message my friends and church family were sending- they could not be there in person, but they were using their resources to let us know that we were loved and thought of.

Since then I have been able to go to yoga daily, see my therapist weekly and even get acupuncture. My acupuncture sessions were a gift from my Zim sisters who asked what they could do to help me. If I had let them, they would have flown the many miles to be in our home with me. I know that I have been able to physically heal faster because I have had access to resources that helped me do so.

A year or so ago I did something for my mother that cost quite a bit. The first thing her friend said to me was, Chipo your mother has never looked more relaxed and happier. There is no price tag for such joy or inner peace.

To me, money is a tool that we can use to improve our lives. Learning how to manage and navigate money issues is an important pathway to more wholesome and fuller lives.

I also like traveling. I won’t tell you how much we spent on flights because you will sooo judge me.



I am really glad that during tough times my friends have bailed me out and that I have done the same for them. My mom and my wonderfully big village of mentors have also been really great at supporting me financially during big transitions like our wedding and pampering us as needed. I want to say this right off the bet to show that I value giving and getting help.

As with credit cards, friends and family loans can be really helpful if used correctly. Unfortunately, as with credit cards, the system is really easy to abuse. A good Samaritan move can easily become a headache and a once strong relationship can become strained.

During graduate school, I was able to save quite a bit of money by working in university housing. That job was a life saver. The job came with “free” housing – in quotes because we worked hard for every bit of that housing. It was really nice to live in rent-free housing for three years. After those three years, I had over $10, 000 in my savings account. Yay me

My problem as one friend has repeatedly told me is that I really like helping out. Some people might say I like fixing problems that have nothing to do with me. I do not think this is a necessarily bad trait. The challenge is that when I was younger, I did not know how to manage this gift.

In a single year, I loaned out over $8,000 to friends and family for various projects that had nothing to do with me. One friend wanted money for her husband to travel to Europe for his graduation. At 26 years old I was loaning over $3k to a 40 something-year-old homeowner to travel all the way from Zimbabwe to Europe for his Ph.D. graduation. I know what it sounds like and I agree. Dah! That was really dumb- that friendship ended in flames. It was a really ugly break up because when I asked for my money back my friend switched topics and called me a word that I can’t write here – yep. It went there.

I also loaned money to a few close relatives who were engaged in a number of projects including house building. I did get back some the money over time, but we had major disagreements over how much I was actually owed. I probably hadn’t done a really good job of keeping track of my expenses. Funny thing- I do not have a house or a brick to my name. The joke is on who??? A running joke between my mom and me is that I no longer loan money to folks with title deeds. Another relative was what I have termed a revolving borrower. They were really good at paying back on time but in a week or so they would be back asking for another loan. Since I was suffering from idle money it was way too easy to loan them money.


One expense I do not regret but could have managed better was contributing to a family fund for a close relative who was very ill. Family emergencies should not drain you financially. There are strategies to plan ahead that we can discuss and brainstorm.

Teamwork makes the dream work but only if there is a clear dream.


It is important to set short- and long-term goals for yourself. My problem at that time is that I was just saving without any serious framework for what I was saving for. My major expenses -rent, food, and tuition where taken care of which made me a little complacent. I was young and not really thinking about buying a house because I had no idea where I was going to settle after grad school. Idleness is bad for your money and bad for your future. When friends and family asked for money, of course, I said yes because I had the money and I assumed that they would pay it back. I did not account for unforeseen events that might prevent even the most well-meaning person to pay back.


Always and I mean always have a clear five-year plan for yourself. The actual plan does not need to be financial, but you can calculate the costs associated with your general life aspirations and transitions from stage to the next.

For example, if you are an international college or graduate student in the US  the fact is that in 3 or four years you will graduate. As an international student, you will need to pay for OPT. The cost has gone up from just under $100 when I was a student to $400. You will want to go home for a visit or invite parents to graduation either one or both of those expenses will cost you upwards of $2500. You will need a place to move into after you graduate and, in most cases,  you will need to pay a security deposit plus first months rent. You may move to a city that will require that you drive. These are not major goals, but you can see how quickly the costs add up. If you are now an adult, you already know how quickly the simple act of living can add up into major expenses. Try to avoid emergency situations by planning for basic things.

So how do we avoid loaning friends and family?

Ok- so in the American culture family loan contracts are a thing and they work but for most African cultures this will not work. So, your default will have to be no. No is a complete sentence.  I know – I am saying this to my amazing friends who have in the past bailed me out (you should have said nooooo). The default (unless someone is dying _ which we should also talk about -life policies and health insurance are a thing- use them) should be a sweet NO.

Because we are kind people, saying no is really hard. However, if you do not have idle money then you are not actually saying no because all your money is planned for. Recently, a friend asked me for a substantial amount for a good reason but since we are praying about our future with 10 kids, I do not have extra money because growing up is expensive. I was able to say no without ruining a good friendship or feeling guilty about it. I even jokingly (no seriously) asked if they wanted to contribute to the goal.

Chipo, are you saying we can’t help our friends and family?

Of course, we can. Establish if the “right” help is money. Let us circle back to my friend who wanted to pay for her husband’s ticket to attend his graduation. There were a few options that we could have explored and in doing so we would have saved what was a really sweet friendship.

  1. If it was absolutely necessary for him to attend the event they could have borrowed from a bank or used their credit cards.
  2. Not attending graduation that year was also a viable option. For example, after my doctorate, I delayed graduation by a year. I know many other friends who have used this option.

A small Zimbabwe (extended family)  fund

Over the years I  have also developed a small SOS fund. We put in $20 a month. I only take from this fund to contribute to various family and friendship needs. Per month I get at an average of 5 financial requests. I have actually kept an excel document to track them over time. Some requests like can you pay for some church trip are a hard no- I do not even attend fun trips I want to go on so that is a hard pass. Can you help me pay kid’s tuition– that one requires additional questioning because tuition is not a random event. From the moment a baby is born it is a fact that they will need tuition, so it really depends. I have two kids I pay tuition for and I plan months in advance for that – even when I had my huge debt to contend with. So depending on the circumstance I really evaluate how much I can contribute but in most cases, my share is never more than 10% of the required amount. This is also the type of money I do not expect to get back, so it is charitable giving.

Health-related contributions

Back home, our healthcare sucks so inevitably family will need support. We can’t put a $ value on health. We can, however, encourage family (those who are able) to take out small health insurance plans. I was so proud of my little sister – her monthly salary is only $600 USD but she has a health plan for herself and the parents (we are cousins) along with a funeral policy. In total, she spends about $100 on these plans for herself and four others. When she got sick a while back the plan covered over $800 in treatment costs for her. (God job mainini – I love you!) When my uncle passed on recently, I was really impressed by the way the funeral policy company handled all the details. Kudos to Nyaradzo funeral policy. Since many of us had just assumed that we would help fund the funeral the family ended up with a lot of extra food that they were able to donate to relatives who needed the help.

Family weddings

Family weddings – when we got married, we avoided asking for contributions because- again a wedding is not an EMERGENCY. We (mostly me) decided on a fancy wedding near the water so we paid for it (thank you, mama, and adopted parents for chipping in). This also extended to my bridesmaids’ dresses. Why should I expect folks to pay for a navy-blue dress that they will only wear once – granted our dresses were actually cute but still. If folks can’t afford a big wedding the court option is very much viable. However, I do love gifting so I will always happily give a gift and if it is someone important to me, I break some rules and chip in. That just means I take away from another budget item. With so many friends getting married we actually have a small wedding fund to cover travel, gifts and last-minute chip in.

Are you a bank?

Basically, you are not a bank so you really must avoid giving out loans. You should also plan your life and that way you can avoid complicated questions. Idle money is bad for your health and relationships. So, by planning you are actually working towards healthier relationships. In addition to an emergency fund, you will need a few other funds related to your Africaness to keep your sanity. When we discuss remittances I will tell you something one of my very smart lady friends told me. She went to MIT and has a Ph.D. in engineering so you should probably take her advice (Love you Loloz).





The average individual in America has at least $5, 331 in credit card debt and many of them are unable to pay it. A lot of people carry debt from student loans.  I was way above average. Being above average is really good but not in this particular circumstance. At its worst, my debt was $33, 051.70. Yep! I was keeping track of the cents. People in developing countries are not doing much better either on dealing with debt. Banks are predatory. I shudder every time I read something on the wonders of mobile money that does not address how easy it has become to get loans that have a ridiculously high interest rate and a very short payback period. In Zimbabwe, the average person is struggling to make ends meet as salaries fall way behind the rapidly increasing cost of essential commodities. And yet, banks are making healthy profits because they routinely partner with employers to offer loans with interest rates of over 20% in many cases. In Kenya, personal debt is also crippling with a national income to debt ratio of over 60%.In South Africa, people can buy groceries on credit. The national personal debt is over $15.1 bn USD. Only the banks benefit, but there are things we can all do to manage debt, get out of it and stay out of it.

The back story

So how does someone with excellent credit, no student loans, and reasonable budget skills end up in such a pit? Good deals! There is always a good deal, and if we are not careful, we can follow it right into the hole of fire. In this particular case, my business partner and I saw an opportunity to expand our business from “trunk of our car” to an actual shoe store in the city. On paper, we had a great deal. A guy in Atlanta was closing down his store and willing to sell us all his inventory for $10 a pair (in hindsight this was a terrible deal) for a minimum of $5,000.

We also designed our own shoe and handbag collection that we had made in China for a great deal. Yeah right!

Between the Atlanta deal, China and a few other store requirements we had a bill of $14,000. This would have been manageable, but we had not factored in shipping costs, shipping times and clearance costs.

How did we pay for the shipment? I had excellent credit and with it came a ton of 0% APR offers. We had all the misplaced confidence that once our delivery landed in Zimbabwe, we would be able to make HUGE profits. The shipment took too long to arrive, and by that time the 0% offers were expiring and that dreaded 24% APR was kicking in. That is the story of how we ended up with $33, 000 in debt.

Other people get into debt as they try to make ends meet. I have spoken to people borrowing to start-up projects as we did, pay tuition, care for a loved or spend on things they like but do not need.


Entrepreneurship sounds sexy and fun, but the reality is a lot uglier. We made the mistake of falling for a good deal. If the business had been in the United States or any other place with a functioning economy, we could have borrowed our startup funds at a reasonable rate, and we would have insured the goods. Things do not always work this way in developing countries with precarious economic situations.

It is quite frightening that academics are suggesting that Africans can entrepreneur themselves out of poverty. Instead, most people are enterpreneuring themselves into debt. Most success stories do not detail the soft loan from wealthy parents or tax credits from governments that allow for the garage start-ups in the US and elsewhere.

It takes a long time for businesses to start making good & sustainable profits.

The truth is also that not everyone should be running a business. Like most people in the diaspora I have loaned friends and family money to start various projects and 8 out of 10 times the person is just not gifted in that area. The business is a waste of financial and time resources.

During the months I carried the debt I definitely felt like I was drowning. I was paying at least $800 a month to avoid being late on the cards, but the interest rates made it hard to make a dent. Our business was doing ok but keeping a business running required us to continue investing in more stock (or so we thought). I read Dave Ramsey’s snowball method and a lot of other books, but nothing was really working. I was still in graduate school earning less than $15,000 a year. I had a lot of expenses back home, school fees for my nephew and niece and other monthly obligations like groceries. The debt was stressing me. I was pulling from my savings to help pay the debt, but I was worried about being so far away from home with no safety net. I just needed to finish school and get a full-time job.

Finding a job is expensive. I invested in interview clothes, travel, resume assistance, thesis editing, and other interview prep help. I am glad it turned out ok, but I just want to emphasize that the cost of looking for a job is not $0. I wrote about this experience here.

Paying off $33k of debt in two years

I would not be writing this blog if the story did not end well. I am not going to make any fun GOT references. The heart of the story is that the same old personal finance principles apply. Live below your means, save 20% and pay off debt. I am going to attempt to show clear examples of how to do this. The summer after I finished my Ph.D., I took on a consulting job in Washington DC. I asked a friend if I could live in a tiny room in their apartment and pay about $200 for utilities. It was a perfect arrangement. I was able to pay off a personal loan and arrange for my husband’s move to the US as well as my own move later that summer to a new state for my job. We tend to get reimbursed after the semester has begun and I was not going to have a paycheck until September, so I needed to make sure I had funds to live on.

The numbers

That summer we also decided to start a new business. I know! Armed with lessons from seasons past we agreed that we would only invest $500. I am happy to report that the company is thriving.

To cut costs, I lived with my friend (Thank you, Ryan). I walked to work and carried my own lunch. In DC lunch expenses plus Saturday brunches can add up really quickly.

When we moved to my new job, we found a tiny one-bedroom apartment for $450 a month (all utilities included) it was a small space, but we never felt it. Maybe being newly married had something to do with our bliss. Our car was paid off. I bought it cash in grad school from a friend. We still have it (although we recently purchased a new car – more on that later). My job was in a small town with nothing much going on, so we splurged on Xfinity for $75 a month to get all our fav channels including HBO. We really like watching comedies, movies and of course GOT, Shameless, etc. Our total monthly expenses were $900 and came up to $1,500 with remittances.

After a few months at the new job, I researched options to deal with the interest. The only viable option was closing the cards and negotiating much lower interest rates.

Closing the major accounts was going to put a HUGE dent on my credit score. I struggled with this for a while, but when I spoke to someone from debt coach, they explained that if I closed the accounts and paid off my debt, I would end up with a better score. My high score at that point was meaningless is I was saddled with debt. So, I worked with them and closed four of my high balance accounts (there goes my 12-year history), and they helped me negotiate low-interest rates of 3% and 4%.

I finally had some breathing room. I could actually use the snowball method. At that point, the business could add another $500 to my $800 to pay off the debt.

BUT: Not everything went to debt

Retirement: More on this later but it is worth mentioning that my job had a 3% match, so I decided to set aside 3% each month towards retirement. If your employer has a match and you opt out, you are just throwing away free money. Or at least money that you are entitled to.

High Yield Savings account: I also opened a high yield savings account with American Express and was able to put in 10% to that account. More on this later

Emergency fund: we made sure that we had at least $3,000 in our emergency fund. Again- more on this later.

After setting aside small amounts, it was all debt. Notice that I went with % instead of real numbers to keep my goals manageable. I managed to do a few consulting jobs – all those earnings went to debt. Tax refunds went towards paying off debt.

I followed up on monies I had loaned friends and family, and all that “extra” income went to debt. In following up on loans, I lost friends and strained relationships. Money is not always good for building healthy relationships.

During those years we did not travel unless someone else was paying for the trip. We did not deny ourselves much because there was nothing to deny ourselves in our town. The one restaurant we liked had dinner for $8, and one can only eat the same meal so many times.

In future posts, I will try to break down some specific things that helped us reach our goal. The critical lesson for us was to live way below our means. I hope to never live in a shoebox again, but I am glad we were able to meet our goals during that season.


  1. Conduct an inventory of ALL your debt. List everything down including interest rates, due dates, and associated fees. List everything down. Include what you owe Sally from work, Auntie Mary and the IRS. It is scary, but it must be done even if the final number is $33 000
Credit accounts Amount Interest rate Annual interest rate Personal set Minimum monthly months to pay
Account 1 $10,675.00 23.00% $2,455.25 $500 21.35
Account 2 $7,355.79 14.50% $1,066.59 165 44.58054545
Account 3 $2,119.17 24.00% $508.60 500 4.23834
Account 4 $435.00 24.00% $104.40 200 2.175
Account 5 $4,855.75 17.00% $825.48
Account 6 $1,264.00 10.00% $126.40 200 6.32
Account 7 $800.00 24.00% $192.00 100 8
Account 8 $1,800.00 5.00% $90.00 100 18
Account 9 $3,746.99 17.00% $636.99 202 18.54947525
$33,051.70 $6,005.71 $2,167


  1. When I did the inventory, my minimum monthly payments were about 40% of my gross salary. I decided on a monthly minimum that was double what the bank was asking for as part of our plan to pay the debt off sooner. After I closed four of the accounts the interest rates fell to 4% which was a lot manageable.

  1. How do you pay off using the snowball method?
  • You start off with the smallest debt which was $800 in our case. After paying the minimum for each account, we threw anything extra to that account which actually allowed us to pay it off in a single month.
  • After you have paid off the smallest account add payments from the account you just paid off to the next smallest debt.
  • This is a much better method than focusing on interest rates.
  1. Cutting down expenses – as explained before – going over our budget with a total debt in mind allowed us actually to reduce our monthly costs. How do you do this?
    1. Reduce your housing cost – move into a smaller place if you need to
      • Consider renting out your main home and moving into something smaller or having renters in one or two bedrooms.
    2. Cut down on any entertainment costs – the boredom will be a good motivator
    3. Live well below your means. There is always something to cut down.
      • People might even have to eat rice beans for a couple of months or
        • place kids in cheaper schools- I know! The horror – but it can be done

Paid off- Now what?

Dave Ramsey would tell you to cut up all your credit cards. He is not wrong. However, I would say let your real honest budget guide the way you live. I have a good friend in Zimbabwe (SHOUT OUT Massy) who has taught me a great deal about economic wisdom. She and her husband have excellent jobs, but instead of renting a fancy place in the nicer and more expensive parts of the city they built a small but really homey cottage on their plot just outside the city. They are now building the main house at their own pace- in the meantime, they live in their cute 2-bedroom house. She said when they bot their plot it was sold for $16,000. They had been renting a bigger house for $500 so when they did the math the plot was a much better investment.

My other friend is a mom of four. They live on one income to offset the cost of childcare in the diaspora. She makes all her meals at home (I have been begging her to start a blog). Her family eats well every day- I am a terrible cook, so I have no such aspirations. She manages to stay on budget by planning out her meals and buying deals. She also makes do with what she has- see picture below. I am sure there are great examples from people in your life or your own cases of adjusting things to make it work.

Follow her page on facebook for amazing recipes and tips to making yummy meals on a budget. Or just follow her because she is amazing and my friend

DISCLAIMER: MoneyProfessor is my personal blog. I provide general information – not professional or financial advice. Opinions and representations on are my own. I am not providing financial advice or legal advice on my blog. I am only providing general information. You should consult a professional before making any financial or legal decisions.


Budgeting 101: IT IS SCARY, BUT IT MUST BE DONE!!!!

Budgeting 101: IT IS SCARY, BUT IT MUST BE DONE!!!!

I love that a lot of my friends are brilliant and well-educated women. Girls Rock!

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When I first started thinking about personal finance, I asked my girlfriends if they had a budget. The popular answer was “kind of.”  Some said they felt that a budget was useless because in most cases we hardly stick to it because life happens. Indeed, life happens.

It also occurred to me that while every personal finance blogger tells people to have a budget very few actually do something like budgeting 101 or budgeting for dummies to give the average person like me a real sense of how budgeting works or should be done. In this post, I attempt to do just that.

What is a monthly household budget?

I was raised by a trader. My mom crossed the border between Zimbabwe and South Africa, Botswana, Zambia and occasionally Mozambique selling different crafts from Zimbabwe. In fact, I was once nearly stolen on the train when she took me to South Africa as a baby. I bring this up because most people in my life have been employed informally. Back when the Zimbabwean economy worked traders could plan their lives send kids (me) to good schools, live middle-class lives and pay their bills. All over the world, the middle class is feeling a little bit of a pinch. The cost of essential commodities is rising faster than people’s salaries, and this makes it a little bit harder to plan for the immediate future, and the long term is often left out of the equation.

Your monthly budget is a plan or a road map for your finances.


Be honest with yourself in terms of your income. How much money do you earn per month? If you have a regular job how much are you taking home after the government takes its share and all your other deductions? If you are self-employed, you may want to calculate an average from the last 6 months. Or as my mother would do – make a budget based on your two lowest earnings over the previous 6 months. Unless you have a fancy high paying job in the tech industry your monthly paycheck will likely stay the same for at least a year – the economy – right!

Step 2. (WISH LIST)

What are the things that you need to live from month to month? Primary needs vary from person to person, but generally, these include (not necessarily in this order):

Household Expenses
Car loan
Car insurance
House insurance
Life insurance
Parental Care
Remittances if different from PC
Charitable giving and tithing
Pet supplies
Tuition (it helps to divide the annual cost by 12)
Travel (this is a HUGE cost in our house)


The best way to figure out how much you spend is to go over your past bills. Try to be as honest with yourself as you can.

I always try to start off the year with a budget breakdown. I am changing jobs, so this is a perfect time to redo the budget and think over my finances. This is a rough draft and a lot more complicated because we do not know for sure yet what our final income will look like and the actual expenses, but this should give you a general idea of how we are thinking about things. I also call this my dump it in all list. We start out by listing all the major expenses (after tax) then we will adjust as we go forward. We are trying to budget about 80% of our combined income – we assume that the real costs will be higher so we will adjust the income portion accordingly. The income from my businesses is pretty set, so there is no wiggle room there.



Plug in the numbers – before you worry about what financial experts say about proportionality just go ahead and do the math to see where you are. Especially on your basic needs. Doing this will help you readjust as needed for long term planning. Your budget can be very fancy, but I like to keep mine simple. This is an easy to use template from

Monthly Budget Template
Monthly income for the month of: _January 2020___________
Item Amount proportion
Salary 1000
Spouse’s salary 1000
Other 0
Total 2000
Monthly expenses for the month of: ___________
Item Amount
Mortgage/Rent 400 20%
Car loan
Car insurance
House insurance
Life insurance
Food 200 10%
Pet supplies
Other 0
Total 600
Income vs. Expenses
Item Amount
Monthly income 2000
Monthly expenses 600
Difference 1400



The first time you do this, you may find out that your actual budget is more than 120% of your income. I have done this too- but I find that the visualization really helps.

Ideally, you want to balance out your budget so that you are spending between 30 &35% of your gross income (pretax) on housing, 15-20% on transportation, 20-20% on food and less than 15% of your income should be going to debt. It is also recommended that you save at least 5% of your income but if you can save 20% including retirement and health care contributions that will be really good. But remember, aggressively saving should only happen when you have paid off your debt.




Here is an example of our budget for the next phase of our lives. I prefer using excel and color coding the budget.

Account Proportion post-tax (net)  income of 80% net of both spouses Proportion of pre-tax (gross) income
household Fixed
Rent 31% 23%
Cellphone Bill 1% 1%
car payment (60-month finance) 6% 4%
Health care (co-payments, Yoga and Biking) 3% 2%
parental care (child care for others) 15% 11%
Monthly Groceries 6% 4%
car and renters  insurance 2% 2%
Utilities (electricity and water) 1% 1%
health insurance  (pre-tax) 6%
dental (PRE-TAX) 1%
vision (PRE-TAX) 0%
Uncle Sam 15%
Retirement contributions 403 or 401k  (PRE-TAX) 6%
Amex Savings (long- and short-term goals minus EF) 16% 12%
Acorns Roth plus tiaa Roth (investment for dummies) 3% 2%
Emergency fund monthly contributions 2% 1%
cable and internet 1% 1%
Car fuel (transportation) 1% 1%
charitable giving 1% 1%
Eating out and entertainment 1% 1%
Clothes and other fun shopping 1% 1%
Travel (non-reimbursable) 1% 1%
Laundry 0% 0%
Remittances- tuition for niece and nephew 1% 1%
Remittances family 1 1% 1%
Remittances Family 2 1% 1%
FAMILY FUND (contributions for funerals, health, weddings, etc.) 1% 1%
Debt free 🙂 0% 0%
TOTAL MONTHLY EXPENSES as a proportion of net and gross 98% 68%
Source Percentage of post-tax income
BOA standing
Account left over from month to month.
Spouse 1 salary after significant deductions (health care) 61%
Spouse 2 portion of salary after deductions (only 33% of income) 33%
business 1 income 4%
business 2 income 2%
Note: this is based on just 83% of our combined income. We are hoping to adjust our expenses to live on only one income in the future. Our actual tax bill to Uncle Sam is 21% this is lower because of some minor adjustments we are working on. We also recently discovered that we underbudgeted travel last year so we will need to clean that up. We are paying more on our car note to try and pay it off sooner -the actual bill is just 3% of our gross income. Although we have met our emergency fund goals, we want to keep growing it with hopes of increasing our family fund contributions as well as our charitable giving.


Just adding the colorful version here because it is so pretty 



Clean up the budget. If you have a partner the assumption here is that you are working together or as is the case in most unions one person will build the budget skeleton, then the team will sit down to clean it up and adjust numbers. I will also write an entire post on how to have the money talk with your spouse and partner. If you are living in a volatile economy,  try very hard to plan with inflation in mind or change some of your money to a more stable currency to give you some peace of mind. If this is not possible, please share some tips and strategies, you have used to stay on track.


Avoid using your credit card or loans to fill in the gaps. Access to credit can create a false sense of stability. Most financial gurus advise against using credit cards for this very reason. Use cash (checking account, mobile money, etc.) as much you can.

If you do use your credit card, schedule auto payments for the beginning of each month. I like to use credit because I get points, but I am also vigilant about paying off expenses each month. Credit cards are a trap that you should really try to avoid.

Do not budget with someone else in mind- for example, some will say Uncle X always sends money. This is a bad habit. Unless you have some reason to believe that uncle X will show up, do not burden someone else.


Cut out non-essentials and live maybe 10-20%below your means. If you cannot afford to pay cash for something, then you do not need it. If an expenditure is causing you sleepless nights, ask yourself if it is worth the stress and increase in your health care costs. If you cannot afford your car or house or house help service, you DO NOT NEED IT! If your kid’s tuition is a constant conversation in the family group, then you are probably sending your kid to a school that is out of your $ range.



Stick to the budget – I will devote a lot of time in the blog discussing some strategies for sticking to the budget drawing on my personal failures and successes. Please share your tips as well. I want to learn from you.

ADVANTAGES OF making  A BUDGET and sticking to it

You are probably asking yourself – why bother? I think about my financial health as being closely tied to mental and physical health. If you sometimes stay up late crunching numbers, then you want to do this so that you can sleep better, but we can also just list out the reasons here

  1. Know what you need to be happy – this is great for negotiating your salary. After I finished my doctorate, I was offered a consulting job at a big firm. I was super excited and too scared to negotiate, so I accepted the first salary they gave me. The salary looked great on paper, but I was not going to be able to live in expensive Washington DC on those numbers. Now, when I get a job offer, I always try to negotiate for a salary at least 20-30% above my needs or current salary. Moving is expensive, and it is often the case that the cities with great jobs tend to cost a lot more
  2. REDUCE EMERGENCIES-I really believe that there are very few real emergencies. Everything else can be planned for. Your car breaking down should not make you bankrupt because ideally, you have an emergency fund to pull from. Child Care should not give you sleepless nights because while pregnancy can be a surprise, the arrival of the baby is not. Include health care costs in your budget early on. Having conversations with mom and dad about their health care will also reduce “emergencies” in the future. Funerals can be an emergency, but weddings are really not the same as children’s tuition, graduation, baby showers, and birthday parties.
  3. Saying NO- It is a lot easier to say no to unwelcome money requests when your money is budgeted for. In future posts, we will discuss long and short-term financial planning. It is a lot harder to say no to people we love when we have what I call idle – unaccountedfor money.


DISCLAIMER: MoneyProfessor is my personal blog. I provide general information – not professional or financial advice. Opinions and representations on are my own. I am not providing financial advice or legal advice on my blog. I am only providing general information. You should consult a professional before making any financial or legal decisions.

Hello and welcome to my $$$$$$$$$$$$ blog 

Hello and welcome to my $$$$$$$$$$$$ blog 

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A few months ago, I went through something really terrible that negatively impacted my physical and mental health. As we were preparing to leave the hospital my husband and I, were both worried about the cost of health care. The question at the back of our minds was: How much would we have to pay for this amazing lifesaving health care that I had just received? At the time I had a few other big expenses on the horizon. I am a financial guardian to my nephew and niece who were both in school. My niece was actually heading to university, and the bill for her education was going to cost about $5,000 (USD) annually. I am also a primary provider for other family members abroad so needless to say money issues were top on our minds.

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I logged into my hospital account and saw that the care I received was just under $24, 000. I decided to call our health insurance to get a sense of what we might have to pay. I trust blue cross blue shield so much now. The customer service lady was very nice. She looked over my medical history and the first thing she asked me was how I was doing. Then she asked if the hospital had sent me a bill. I said no, I was just checking. She said okay and explained that the hospital should not send out an invoice for at least 90 days. I was relieved to hear this. She affirmed what I already knew that the medical bill was $24,000 then she said I had no reason to worry. Given my health care plan, I would pay no more than $250 out of pocket. I had assumed that this would be the case because OBVIOUSLY, I had read all my medical documents and benefits packets a million times. At that moment I was happy to have had the foresight to choose a relatively pricier plan (it cost me an additional $300 a year) and ultimately saved me about $2,000.

Since then I have been thinking actively about financial literacy. I am a professional, I am educated if having a doctorate in political science counts but many financial things confuse me. There are business decisions that I have made (or not) that have been costly. In my work, studying migration and remittances, I often have conversations with fellow immigrants about money. In most cases, folks are anxious about debt, retirement and making ends meet for themselves and their families

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I am  really grateful to all the money bloggers out there especially women and people of color – special shout out to thefrugalphysician, immigrantfinances, paychecksandbalances, and the budgenista. There are plenty more bloggers out there – I will share a comprehensive list laters…

In reading these many blogs and a ton of books (I love most of the ones of this list) it occurred to me that most of the authors and speakers are people who have made it. They have made their first million, their finances are in top shape, and so now they are sharing past experiences. I am glad they generously share their financial knowledge. However, hearing from such accomplished people can be intimidating. I am hoping to bridge the gap by writing about money on my path to physical and mental healing. I am not a millionaire; I do not make a six-figure salary- I am just an ordinary early 30 something professional – professor looking to discuss money issues and provide guidance to younger immigrants. Hopefully, they can learn what we missed and have an easier time at it so here we go…

Agh, my husband, said I have to mention this – I also started a business using my credit card during graduate school. I ended up with $33,000 in credit card debt at a 24% APR come back for the full story and please do not laugh at me.Image result for let the games begin gif

DISCLAIMER: MoneyProfessor is my personal blog. I provide general information – not professional or financial advice. Opinions and representations on are my own. I am not providing financial advice or legal advice on my blog. I am only providing general information. You should consult a professional before making any financial or legal decisions.