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HomeGENERAL NEWSMerry Christmas, Empty Wallets: The Financial Hangover for Kenyans This Holiday Season

Merry Christmas, Empty Wallets: The Financial Hangover for Kenyans This Holiday Season

Every December, many urban dwellers head back to their villages for festivities, often exuding an air of sophistication. They spend extravagantly, sometimes borrowing money to purchase items they don’t necessarily need and entertaining friends to make an impression. Some arrive in hired cars, posing as owners of high-end models like Jeeps or Toyota V8s. While there’s nothing wrong with hiring cars, the pretense to project affluence is common.

Financial Fallout of Overspending

This tendency is particularly pronounced among the lower middle class. Once the festivities conclude, many find themselves financially drained, struggling to pay bills, or even negotiating refunds. Kanene Kabiru, a director at Rwathia Distributors in Nairobi, notes that the festive season triggers reckless spending, which benefits traders and shylocks. He observes that businesses like his—selling beer, food, and lodgings—double their sales targets during this period. Kabiru reveals that some revelers, after spending excessively, return later to plead for refunds to manage financial woes.

One such case involves a man who spent over Sh200,000 during the holidays, only to later request a refund of Sh10,000 to address his financial troubles. These instances highlight the financial strain caused by unchecked holiday spending.

Lessons from Past Experiences

Michael Nduati, an accountant, recounts how he learned a hard lesson in 2021. Armed with Sh100,000, he returned to his rural home in Ngurwe-ini, hiring a car at Sh2,000 per day and spending an additional Sh2,000 daily on fuel. For eight days, he entertained friends at local bars and nearby towns. However, his festivities ended in tragedy when he caused an accident on day six. Arrested and charged with causing death by reckless driving, he spent two months in remand. The fallout was severe—he lost his job, faced a Sh300,000 repair bill from the car hire company, and suffered emotional distress. Since then, Nduati has avoided the chaotic December holidays, choosing instead to fast and pray.

The Role of Police During Festivities

Kigumo Sub County police boss Kiprono Tanui confirms that the festive season often leads to reckless behavior. He explains that many cases reported during this time involve financial mishaps, such as individuals having their drinks spiked or flaunting cash in bars only to be robbed. Some even refuse to pay bills, leading to confrontations with bar owners and eventual arrests. Borrowing to fund such extravagance adds to the financial mess.

Shylocks’ Booming Business

December is the most profitable month for shylocks like Mary Karinga, who has been in the lending business for 12 years. Karinga explains that she demands collateral worth at least 40% more than the loan amount to mitigate risks. Her customers, often urban residents, leave behind items such as cars, laptops, and jewelry as security. She charges a 30% monthly interest, and most loans are repaid by February. Her business thrives on the financial indiscipline displayed during the festive season.

Financial Discipline: A Necessary Shift

Financial coach Wanjumbi Mwangi attributes these issues to a lack of spending discipline. He describes the reckless spending of hard-earned money during festivities as economic madness. According to Mwangi, earnings should be saved or invested to grow wealth rather than squandered. He warns against draining savings on unbudgeted expenses, emphasizing that the festive season comprises only a few days in a year. Many people end up in debt, selling household items at a loss to survive after the holidays.

Mwangi advises adopting financial discipline, saving, acquiring assets, and diversifying income sources. He stresses the importance of living responsibly and avoiding choices that lead to economic ruin. The festive season, he concludes, should not be an excuse for financial recklessness but rather an opportunity to reflect on prudent financial habits.

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