How mobile-based tools are helping to build a saving culture in Kenya
One of the things that can really kill the mood of a special occasion like a birthday or a holiday is the lack of enough resources to shop for gifts or other items that may be needed to make the event memorable.
Unfortunately, over the last five years, the high cost of living has been presenting a real challenge for Kenyan households, many of which are struggling to make ends meet, let alone celebrate special occasions.
As the festive season approaches, saving beforehand can be an excellent strategy for households to manage the high cost of living in an environment where disposable incomes are shrinking.
Early planning can help households to avoid financial stress, prevent debt accumulation and allow for a more enjoyable and memorable celebration focused on loved ones rather than expenses.
It can help one stay within budget, take advantage of sales and ensure that they have sufficient funds not only for gifts, travel and other festive activities, but also for school fees after the holidays are over.
But how can one go about planning in advance for future activities, in an environment where resources seem to be getting scarcer?
According to Samuel Njuguna, the founder of Chumz app, one of the most effective ways to save for a special occasion such as the Christmas holidays, amongst other occasions, is to automate savings.
“One can automate their savings by putting them in mobile based savings applications, designed to help users save money through goal-based and behavioral nudges,” says Njuguna.
Applications such as the Chumz app, licensed in 2022 by the Capital Markets Authority, allow users to start saving with as low as five shillings.
The platform allows users to create a specific goal in the app, for instance “Christmas 2025” and set a target amount and date (e.g., Sh30,000 by December 20, 2025).
“Chumz utilizes behavioral psychology, gamification and customizable tools to help you track and save gradually toward your target,” said Njuguna.
Users can link their M-Pesa and set up automated savings triggers like saving a small amount daily or weekly (e.g., Sh100 every Monday), saving a percentage every time they receive money in M-Pesa, as well as rounding up transactions and saving the spare change.
Chumz sends its users nudges and reminders when they spend money, encouraging them to save instead of spending impulsively. This can be 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,” said Njuguna.
After spending heavily over the Christmas holidays, one of the issues that many Kenyans struggle with is 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 January school fees, for example, “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,” stated Njuguna.
If you happen to be part of a chama or family saving group, the Chumz app has a group feature that allows multiple people to contribute toward one school fees fund.
