Unlock Financial Freedom: Personal Finance Tips for Smart Money Management

Image of personal finance on laptop screen

I love money.

Everything about it – how to make, save, invest and even borrow money!

If you are looking for a detailed explanation of what is personal finance, then you are in the right place. 

In this guide, we are going to cover all the brass tacks around personal finances so that in the end, you’ll be able to call yourself a money-smart youth!

Let’s take a moment and look at the basics of personal finance, so you can understand what it is you have to master… 

What is personal finance?

Personal finance is a blanket term used to describe everything that revolves around managing your money. 

As the name suggests, personal finance has nothing to do with the economy, how much your friends earn or spend, or how much your partner earns. Your personal financial life is unique to you. 

Do you never calculate your net worth by including your country’s GDP? It all boils down to how you approach the various pillars of personal finance. 

I know what’s going through your head right now… 

What are these pillars of personal finance? 

There are four common pillars of personal finance, but I have extended our list to six to provide an in-depth understanding of this topic. These include; 

  • Making Money (Earning)
  • Spending (Expenditure)
  • Savings
  • Investing 
  • Loans/Debts
  • Banking

6 Pillars of Personal Finance that You Should Master as a Young Person

Here’s an in-depth look at the various pillars of personal finance that will affect how you make your financial decisions as a young person. 

Making Money

Making money is the foundation of all the other pillars of personal finance. 

I mean, how would you save if you aren’t earning? 

Would you be able to invest without some extra income? 

To succeed in other areas of personal finance, you first need to master the concept of making money – most notably when you are still young. 

Earning more money will increase your cash flow, allowing you to grow your savings and investment and clear your debts even quicker. 

So, how can you make more money as a young person? 


Let’s be honest, a large number of us go to school so that someday we can be employed in some fortune 500 company. Live the 8 to 5 lifestyle and enjoy all the benefits of being employed. It is an excellent thing to yearn for this. But it should only be a start for you. 

As you seek employment, try hard to get a job that offers you room to grow and earn more. Often, we find ourselves complacent with our jobs. 

As a money-smart youth, this should not be you. Look for a job that promises you a promotion, a salary increase, or training to help you climb the corporate ladder. 

So, revamp your resume regularly, and be on the lookout for a better-paying job. 

Start a side hustle for Extra Income 

As a young person, employment is not the only way to make money. 

We live in an era where almost everyone has a side gig that gives him or her some extra income. Some examples include Uber eats, Freelance writing, Vlogging, dropshipping, etc. 

Even crazier, you can now sell feet pics and earn good money from it!

And I love side hustles. Here’s why… 

They are flexible. And you have total control over how you want to scale them, something you cannot find with employment.

Nonetheless, it is essential to note that some side hustles are more demanding than others and require more work to start and run. 

If you need some financial aid, find those easy to start and get the ball rolling. You can always venture into others later on. 

How do you determine the best side hustle to get into? 

Well, chances are you already have what’s needed to start a particular side hustle. Think about what you love to do. Is there a way you can monetize that specific thing? 

Let’s look at some skills that are easy to acquire and have the potential to bring you more money: 

  • Writing – Can you string together sentences that make meaningful sense? If yes, becoming a freelance writer is a way for you to make some money online. 
  • You are fluent in a language – believe me, people are more than willing to pay you to tutor them in foreign languages. 
  • Graphic designing – look around you. How many logos can you spot? Your computer has one, and your phone also has one. When it comes to designing graphics, the options are endless for you to explore. 

The list is long, and this article explains in detail how you can make money online as a young person in Kenya.

Set up a traditional business

There’s no confinement to what you can and cannot do to make money (as long as it’s legal), and setting a business the traditional way is one of the best ways to do so. 

The only drawback I find with starting a business is that it often requires a lot of capital and intense work to succeed. As a result, I don’t find it the most convenient way for a young person to make money. 

My opinion notwithstanding, if you feel you have the capacity to start and run your own business, by all means, go for it. 

Some common business ideas you can try out include; 

  • Open a food store
  • Start an internet cyber cafe
  • Cleaning services 
  • Retail store 
  • Car detailing

Spending (Expenses)

Take a minute to retrospect your spending habits… 

How many times have you bought something that you did not need? Ordered for some takeout when you could have quickly cooked at home? Paid for a subscription that you don’t even use? 

All these are examples of bad spending habits that, if not managed correctly, can lead to your financial downfall. 

As you work on understanding your personal finances, ensure that you are also developing good spending habits. 

One of my favorite ways to ensure I don’t overspend is budgeting. 

As a young person, financial planning is essential if you want to live a comfortable life. Find ways through which you can track your spending habits. 

Personally, I have always used apps like wallet to record my expenses and income. Knowing how my money flows gives me the power to manage it effectively. 

Other tips that can help you to improve your spending include; 

Comparison shopping – where you find different retailers that stock the item you want and buy from the cheapest one. 

Buying in bulk – bulk purchases are often less expensive, and some stores will often find amazing discounts on bulk purchases.

Watching out for discounts – is an excellent option if what you need to buy does not have urgency. 


My favorite pillar of personal finance – saving. 


It is through saving that I have been able to achieve most of my goals. 

As a young person, do you have set goals? 

It could be a goal to buy a car, a new apartment, a new computer to help you work better, secure your life insurance, or you could even be saving for retirement. 

It may often feel overwhelming to save, especially if you have so many responsibilities and are living paycheck to paycheck., but try to incorporate it into your budget. You will thank yourself for doing so. 

As human beings, we are creatures of habit. And the best way to become a good saver is to make it a habit to save even $1 a day. Slowly, you will be more comfortable with saving even large amounts of money. 


If there’s one thing that we as young people struggle a lot with, it is debt. 

Be it student loans, credit card loans, or loans issued by friends, a good number of us owe someone or institution money. 

Once you have your income, expenses, and savings right, it is now time to get your borrowing life in order. 

Contrary to popular belief, borrowing money is not a bad thing. In some cases, it is the best thing to do. It all boils down to why you are borrowing and how you utilize the loans given. 

Sadly, most young people borrow too much for the wrong reasons. In the end, the loans become unmanageable, which often leads to the loss of assets owned and even friends. 

Here are some nuggets on how to become a better borrower; 

If you are using a credit card, ensure that you pay in full at the end of every month. Also, reduce the number of credit cards you have to one. 

Don’t take a mortgage if it’s going to break your budget. While society has programmed us to believe that owning a home is a sign of success, I think it’s not. If you can only afford to rent, please do so until your income can allow you to buy a house. 

Avoid student loans if you can. Kenya is one of the countries that are in a student loan crisis. Millions of students take up loans to fund their education only to end up jobless and unable to pay back their loans. You can take up part-time jobs to finance your education on top of what you can already afford. 

You don’t need to get a flashy car just for the sake. Ask yourself this, would a Ksh200,000 Nissan sunny get you from the CBD to your place of residence? Then why do you need to spend close to 2.5 million shillings for a new Subaru forester? 


We all want to be rich – one way or another. But unlike Bezos, you and I don’t have a multi-billion eCommerce platform to help us get there.

However, this does not limit us. 

Investing provides us with a means of growing the little we have into riches. 

But believe me, it’s not easy as it sounds. Most people fail terribly at it, while others never give it a try. 

As a young person working towards financial success, it is important to get started with investing. Learn the basics. Try it out and adapt what works.

If you are employed, you can invest by contributing to your retirement plan, and if your company does not provide one, open one for yourself.

With investment, it is advisable always to invest what you can afford to lose. This way, if things don’t go as expected, you are not left in a bad financial state.

And now to the last pillar of personal finance on our list…


Proper banking can be a catalyst to your success in all the other areas of personal finance we’ve discussed so far.

But as a young person, how well do you understand the banking system in your country? It may not seem important to you to know how banks operate but believe me, you should.

Banks provide essential products and services that we can benefit from as young people. For example, if you are looking to save without being charged, COOP bank of Kenya allows you to do so with their Young Innovators Account. I bet you didn’t know that.

Also, if you are looking to borrow some money, understanding the different interest rates and loan packages offered by various banks will go a long way in ensuring you get the best deal.

The benefits of understanding the banking sector are endless. But do not fret. I will cover every important detail there is to know about banking in Kenya and elsewhere for you. 

Why is Personal Finance important? 5 Reasons to Manage Your Money

If you’ve got this far, you already understand what personal finance is all about and how to get your financial goals in order. In this next part, I will tackle some of the reasons why personal finance is important to you as a young person. 

Let’s dive right in… 

It makes you a money-smart youth. 

You must understand that money issues go beyond what most young people think. It does not start with working hard and making money. Financial literacy widens your scope when it comes to how you handle money. 

Understanding personal finance enables you to answer some critical money questions such as, what do I do after I get that money? 

How much should I spend or save? 

How much should I put into my retirement savings? And how should I budget to ensure that I still maintain my cash flow? 

With all this figured out, you will make more money-smart decisions that will help you achieve your goals. 

It is also easier to handle any financial situation you face if you have the requisite financial planning knowledge. 

It gives you a sense of financial security

As a young person, how many times have you been worried about where your next job will come from once your current gig is complete? Or where will your dependents get help once you are no longer in the picture? 

I have been there, and believe me, it is not pleasing to think of your family suffering due to lack of money. 

However, proper financial planning and literacy give you a sense of financial freedom and security. 

It helps you to manage your debts well 

As aforementioned, having debts is not a bad thing. The problem comes in when you make it a habit to take loans often without reason. 

And take note of this, debts can help you to grow rich, but if managed well. 

Personal finance gives you the knowledge to manage your debts effectively and even get others. 

Some of the ways you can become a better manager of your debts are by cutting down on your erroneous spending habits and improving your savings culture, all of which are taught in personal finance. 

Financial planning has emotional and mental benefits 

You can agree with me that there is a sense of calmness and peace that engulfs you when your personal finances are in order. 

In general, understanding personal finance gives you emotional and mental health benefits. 

But how so? 

Having your finances in order through proper saving, investing, and debt management takes away particular worries like, how will I survive if I lost my job today? What will happen to those who depend on me when I cannot provide for them financially? 

This means less stress and more optimism as you live. 

And believe me, the good emotional and mental health obtained through proper financial planning has tremendous positive effects on other aspects of your life. 

Money doesn’t buy happiness, but it does buy security and peace of mind. 

How can Young People improve their personal finance knowledge?

You don’t just wake up one day and become a money-smart person. It takes continuous learning and dedication to get to a level where you can comfortably say you have your financial life figured out. 

Below are some ways through which you can improve your financial literacy: 

Take financial courses

What better way to master personal finance than to learn it from the experts directly? 

Taking financial courses allows you to tap into the vast wealth of knowledge and experience that those offering the course have. You get to learn what works and what does not. 

It is important to note that some concepts like retirement planning are pretty complex, and without the help of experts, you might never figure them out on your own. 

But where can I find trustworthy trainers of personal finance? 

I have no specific course to plug here, but a simple Google search on ‘Personal Finance course near me will give you the answers you are looking for. 

Grab a personal finance book

If you enjoy reading books, thousands of books are out there teaching personal finance that you can enjoy.

Read blogs

Blogs like this one provide you with invaluable personal finance education for free!

And you are not limited to learning from one blog. There are thousands of personal finance blogs out there you can learn from. And the advantage of doing so is that you get a broader understanding of a given topic as you learn from different people. 

Follow a financial coach/smart money, people 

Sometimes learning personal finance is as simple as following a renowned personal finance guru. This can be online or by subscribing to their newsletter. 

The invaluable tips that they share with your audience will go a long way in helping you out as you figure your financial life. 

Walk the talk

Walk the talk. You’ve taken time to learn what personal finance is. 

Believe it or not, practicing what you learn in personal finance is arguably the most effective way to improve your financial life.

Final take  

As I wind up, it is essential to remember that it takes time and patience to finally have a clear picture of your money life. Don’t give up even when you can’t stick to your budget or savings target. Only if you remain true to your course of action will you get to enjoy the fruits of success that come after that.