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Financial habits often dictate whether you build wealth or struggle to make ends meet. While most people aim to manage their finances wisely, certain habits can quietly drain your income without you realizing it. Here are nine common ways you may be accidentally making yourself poor and how to avoid them.

1. Smoking

Smoking not only harms your health but also significantly drains your wallet. Cigarettes are expensive, and the cumulative cost over weeks, months, and years can add up to a substantial amount. For example, spending $5 a day on cigarettes means $1,825 lost in a year. Quitting smoking can save your health and financial well-being.

2. Alcoholism

Regular drinking or alcoholism is another costly habit. Social drinking or binge-drinking weekends might seem harmless, but these expenses can quickly add up. Instead, limit alcohol consumption or allocate a strict budget for social outings to save money.

3. Overpriced Coffee

While grabbing a cup of coffee at a trendy café seems innocent, doing it daily can wreak havoc on your finances. Spending $4 on coffee every day results in $1,460 annually. Opt for brewing coffee at home as a cost-effective alternative.

4. Eating Out Daily

Dining out is convenient but expensive. Regularly eating at restaurants or ordering takeout can strain your budget. Preparing meals at home is not only cheaper but also healthier. Plan your meals and cook in batches to reduce costs and save time.

5. Bottled Water

Buying bottled water frequently is a silent money drainer. Investing in a reusable water bottle and using filtered tap water can save you hundreds of dollars annually. It’s better for your wallet and the environment.

6. Video Game Points

Spending money on in-game purchases, upgrades, or virtual points can drain your finances without adding real value to your life. Set limits on gaming expenses and focus on free or less costly entertainment options.

7. Buying Branded Clothes

Purchasing expensive branded clothes regularly can leave you broke, especially if you’re trying to keep up with trends. Focus on buying quality, affordable clothing that lasts longer. Thrift shopping and seasonal sales are great alternatives to save money.

8. “Needing” the New Phone

Every year, new phones are launched with flashy features that make your current device seem outdated. However, constantly upgrading to the latest phone can be a costly habit. Stick to your current device until it’s absolutely necessary to upgrade.

9. Gambling

Gambling is one of the fastest ways to lose money. While it may seem like an opportunity to win big, the odds are usually against you. Gambling can lead to financial ruin if not controlled. Avoid it altogether or set strict limits to prevent losses.

How to Break the Cycle

To avoid accidentally making yourself poor, take these actionable steps:

• Track your spending: Monitor where your money goes and identify unnecessary expenses.
• Create a budget: Allocate your income to essentials, savings, and discretionary spending.
• Set financial goals: Focus on saving for long-term needs like emergencies, investments, or retirement.
• Practice mindfulness: Before making a purchase, ask yourself if it’s a want or a need.

Conclusion

Wealth is built by adopting smart financial habits and avoiding unnecessary expenses. By being mindful of these nine common money-draining habits, you can make better decisions, save more, and secure a stable financial future. Remember, small changes today can lead to significant improvements tomorrow.

M-Pesa, Kenya’s leading mobile money transfer service since 2007, continues to revolutionize financial transactions. Safaricom has updated its M-Pesa withdrawal and sending charges for 2025-2026. With M-Pesa, users can send money across Kenya and internationally with ease and security.

To use M-Pesa services, registration requires an original ID (National ID, Passport, Military ID, or Alien ID/Foreigner Certificate). The maximum transaction limits include Ksh 500,000 per day and Ksh 250,000 per transaction, with a maximum account balance of Ksh 500,000. The minimum withdrawal amount is Ksh 50.

Below are the updated M-Pesa transaction charges for 2025-2026.

1. M-Pesa Withdrawal Charges (2025)

2. M-Pesa Transfer Charges for Registered Users (2025)

3. Pochi La Biashara Charges

4. M-Pesa Transfer Charges to Other Mobile Networks (Telkom and Airtel)

5. M-Pesa Transfer Charges to Unregistered Users

6. M-Pesa ATM Withdrawal Charges

Important Notes

1. Account Balance: Maximum account balance is KES 500,000.
2. Daily Transaction Limit: Maximum daily transaction value is KES 500,000.
3. Per Transaction Limit: Maximum per transaction is KES 250,000.
4. Minimum Withdrawal: Minimum withdrawal amount at agents is KES 50.
5. Reversals: To initiate an M-Pesa reversal, forward the transaction message to 456.
6. Rewards: Transactions earn Bonga Points.

M-Pesa continues to simplify money transfers and withdrawals, ensuring flexibility and reliability for millions of users. Stay informed about these charges for a smooth and efficient mobile money experience.

The M-Pesa PayBill service continues to play a pivotal role in facilitating seamless and timely payments for businesses and customers across Kenya. With PayBill, businesses can easily collect money, ensuring efficient cash flow management.

Here is a breakdown of the M-Pesa PayBill transaction charges effective for 2025-2026:

M-Pesa PayBill Charges (2025-2026)

Key Highlights

1. Zero Charges for Low-Value Transactions:
   Transactions below KES 100 remain free, encouraging inclusivity and promoting low-value transactions.
2. Standardized Charges for High-Value Transactions:
   Transactions above KES 50,000 are capped at KES 108, offering predictability for high-value payments.
3. Affordable Rates:
   With charges starting as low as KES 5 for transactions between KES 101–500, the service remains affordable for the average Kenyan customer.

Conclusion

M-Pesa PayBill remains an indispensable tool for businesses and individuals, ensuring secure and efficient payments. The 2025-2026 charges reflect Safaricom’s commitment to affordability and financial inclusivity. Whether you’re paying bills or running a business, understanding these charges will help you make informed financial decisions.

M-PESA, Kenya’s leading mobile money platform, continues to be a cornerstone for daily financial transactions. From sending money to paying bills, it plays a critical role in the lives of over 30 million active users. With updated transaction charges taking effect in January 2025, Safaricom has adjusted its fees to reflect economic trends and enhance accessibility for all users. Here’s a comprehensive breakdown of the latest charges and practical tips to maximize M-PESA’s value.

Revised Charges for Sending Money

M-PESA’s sending charges depend on the transaction amount and whether the recipient is a registered M-PESA user. For 2025, these charges are as follows:

To Registered M-PESA Users

Note: Transactions between KSHS 1 and 100 are free, fostering inclusivity for low-value exchanges.

Withdrawal Charges at M-PESA Agents

Withdrawing money from M-PESA agents incurs the following fees:

ATM Withdrawal Charges

Using ATMs for M-PESA withdrawals comes with these fees:

Free Services and Additional Charges

• Free Services: Deposits, balance inquiries, PIN changes, airtime purchases, and M-PESA registration.
• Maximum Account Balance: KSHS 500,000
• Maximum Daily Transaction Limit: KSHS 500,000
• Minimum Withdrawal Amount at Agents: KSHS 50
• Self-Reversal: Forward the wrong transaction message to 456 (free).

Comparison with Competitors

In 2025, other mobile money platforms like Airtel Money offer competitive rates. For instance, sending KSHS 1,000 via Airtel Money costs KSHS 11, compared to M-PESA’s KSHS 13. Similarly, Airtel Money often has lower withdrawal fees for specific transaction ranges, providing users with more options.

Cost-Saving Tips for M-PESA Users

1. Combine Transactions: Consolidate smaller transactions to reduce cumulative fees.
2. Leverage Free Services: Use M-PESA for free airtime purchases and balance inquiries.
3. Plan Ahead: Anticipate large transactions to avoid unnecessary fees.
4. Stay Updated: Regularly check for fee revisions to make informed decisions.
5. Monitor Costs: Keep track of your transaction history for financial accountability.

Frequently Asked Questions

1. What services are free on M-PESA in 2025?
Deposits, balance inquiries, PIN changes, airtime purchases, and registration are all free.

2. What is the daily transaction limit?
You can transact up to KSHS 500,000 daily.

3. Can I deposit directly into another user’s account?
No, deposits into another user’s account must be initiated via transfer.

4. How can I reverse a wrong transaction?
Forward the erroneous transaction message to 456 for a self-reversal, free of charge.

Final Thoughts

M-PESA remains a cornerstone of Kenya’s financial landscape. Its revised charges for 2025 are designed to balance inclusivity and operational sustainability. By understanding these charges and leveraging cost-saving strategies, users can maximize the value of M-PESA while minimizing expenses. As Kenya’s financial ecosystem continues to evolve, M-PESA’s adaptability ensures it remains a trusted partner for millions.

Filing tax returns is a mandatory requirement in Kenya for anyone with an active Personal Identification Number (PIN), even if you haven’t earned any income during the tax year. A nil return notifies the Kenya Revenue Authority (KRA) that you have no taxable income to report.

Failing to file your returns, including nil returns, can result in penalties and affect your access to certain government services. This guide will walk you through the simple process of filing nil returns on the iTax platform.

What You’ll Need to File Nil Returns

Before you begin, ensure you have the following:

• Active PIN: Your KRA PIN is essential to log in to iTax. If you don’t have one, register at the KRA website.
• Tax Year: You’ll file nil returns for the previous tax year, which runs from January 1 to December 31.
• Internet Access: A computer or smartphone with a stable connection is recommended.
• No Tax Obligations: Nil returns are only for individuals without taxable income during the tax year.

How to File Nil Returns on iTax: Step-by-Step Guide

Step 1: Log in to iTax

1. Go to the iTax portal: iTax Login.
2. Enter your KRA PIN and password.
   • If you’ve forgotten your password, click “Forgot Password” to reset it. An email with reset instructions will be sent to your registered email address.
3. Once your password is reset, log in with your updated credentials.

Step 2: Navigate to the Returns Section

• Once logged in, locate the “Returns” tab in the main menu.
• Click on “Returns” to access the options for filing tax returns.

Step 3: Select “File Nil Returns”

• Under the Returns menu, you’ll see several options, including:
  • File Return
  • File Amended Return
  • File Nil Return
  • ITR for Employment Income Only
• Click on “File Nil Return” to proceed.

Step 4: Choose Your Tax Obligation

• On the File Nil Return page, a drop-down menu will prompt you to select your tax obligation. Choose the appropriate category based on your tax status:
  • Income Tax Resident: For Kenyan residents.
  • Income Tax Non-Resident: For non-residents.
• After selecting, click “Next” to proceed.

Step 5: Confirm the Tax Date

• The next page will display the tax year for which you’re filing nil returns.
• Confirm that the dates are correct.
• Click “Submit”, and a pop-up will ask you to confirm your action. Select “OK.”

Step 6: Download the Acknowledgment Receipt

• Once your submission is successful, you’ll be directed to a “Thank You” page.
• Click “Download Returns Receipt” to save a copy of your acknowledgment.
• This receipt serves as proof that you filed your nil return.

Additional Tips for Filing Nil Returns

• File on Time: The deadline is usually 30th June of the following year. Late submissions may attract penalties.
• Seek Assistance: If you encounter difficulties, contact KRA support via:
  • Email: [email protected]
  • Phone: +254 20 4 999 999 or +254 711 099 999
  • In-Person: Visit a KRA office near you.
• Understand Your Tax Obligations: Filing nil returns is only for individuals with no taxable income. If you earned an income, file regular returns even if it’s below the taxable threshold.

Final Remarks

Filing nil returns in Kenya is a simple process that ensures compliance with tax regulations and prevents penalties. By following the steps outlined above, you can efficiently file nil returns using the iTax platform. Make it a habit to file your returns annually, regardless of your income status, to stay compliant with KRA requirements.

Happy filing!

It may seem paradoxical, but in the financial ecosystem, the rich borrow money to grow their wealth, while the middle class and poor often deposit their savings in banks, earning marginal returns. This ironical relationship between borrowing and saving exposes the contrasting financial strategies of the rich and the average individual. The rich have mastered the art of using borrowed money to generate wealth, while the middle class and poor often rely on savings accounts and fixed deposits that barely keep up with inflation.

This phenomenon reveals the nuances of financial literacy, risk appetite, and the ability to leverage money for wealth creation. Let’s explore this irony in detail, examining why borrowing can be smarter than saving and how financial literacy divides the rich from the rest.

The Borrowing Game: Why the Rich Take Loans

Rich individuals are often seen borrowing large sums of money from banks. It may seem counterintuitive—why would someone wealthy need loans? The answer lies in their financial strategy. Rich people borrow not out of necessity but as a deliberate choice to grow their wealth. They understand that money can generate more money, provided it is invested in productive assets.

For instance, Mukesh Ambani’s Reliance Industries has a debt of ₹154,478 crore (approximately $22 billion). Similarly, Tata Motors, a flagship company of the Tata Group, carries a debt of about $14 billion, while the Tata Group’s total debt stands at $36 billion. These figures are staggering, but they reflect strategic borrowing aimed at funding growth and expansion. By borrowing, these corporate giants build industries, expand operations, and create jobs, ultimately earning returns that far exceed the cost of debt.

Borrowing allows the rich to access large pools of capital without diluting their ownership in their enterprises. They supplement borrowed funds with public investments by issuing shares, which come with no obligation to pay interest. This strategic mix of debt and equity enables them to achieve high returns on investment, often exceeding 20% annually.

The Middle Class and Savings: A Conservative Approach

In contrast, the middle class and poor typically prioritize saving over borrowing. They deposit their money in banks, earning modest returns through savings accounts or fixed deposits. A savings account in India offers an interest rate of about 4%, while fixed deposits yield around 7%. However, these returns are often negated by inflation and taxes.

The Inflation-Tax Trap

To understand this better, consider a fixed deposit yielding 7% annual interest. For someone in the 20% income tax slab, the effective post-tax return is reduced to 5.6%. If inflation is 5%, the real return on investment drops to a mere 0.6%. Worse, if money is kept in a savings account, the return is even lower, often yielding negative real returns after accounting for inflation.

This conservative approach reflects the middle class’s limited understanding of wealth generation and a lower tolerance for financial risk. While savings provide security, they rarely create wealth in the long term.

Productive vs. Unproductive Borrowing

The primary distinction between the borrowing strategies of the rich and the middle class lies in how they use borrowed funds. Rich individuals and corporations borrow money to invest in productive assets—businesses, factories, and industries that generate income. On the other hand, the middle class often borrows for unproductive or less-productive purposes such as buying a car, financing a wedding, or purchasing a house.

A Tale of Two Borrowers

1. The Rich Borrower: A wealthy entrepreneur borrows ₹10 crore at an interest rate of 10%. Using these funds, they set up a manufacturing unit yielding a return of 20%. After paying ₹1 crore in annual interest, they retain ₹1 crore in profit, effectively earning wealth from borrowed funds.
2. The Middle-Class Borrower: A middle-class individual borrows ₹10 lakh to buy a car at the same interest rate of 10%. While the car may provide convenience, it does not generate income. Instead, the borrower ends up paying ₹1 lakh annually in interest without any financial return.

This stark contrast highlights the rich’s ability to leverage debt as a tool for wealth creation, while the middle class often incurs debt for liabilities that do not contribute to financial growth.

The Rich Understand the Power of Financial Leverage

The financial success of the rich hinges on their ability to use financial leverage effectively. Financial leverage refers to the practice of using borrowed funds to amplify potential returns. For instance, if a business generates a 20% return on investment and the cost of borrowing is 10%, the net profit from the borrowed funds is 10%. This strategy enables the rich to multiply their earnings.

However, financial leverage requires skillful management. Poor financial planning or mismanagement of borrowed funds can lead to disastrous consequences. This distinction separates successful entrepreneurs like Mukesh Ambani from individuals like Anil Ambani, whose mismanagement of debt led to financial distress.

The Role of Risk and Financial Literacy

The rich’s ability to grow wealth through borrowing stems from their higher risk tolerance and better financial literacy. They are willing to take calculated risks, leveraging borrowed funds for high-reward opportunities. Moreover, their financial literacy equips them with the knowledge to identify profitable investments and manage debt effectively.

In contrast, the middle class often lacks the financial education needed to use money as a tool for wealth creation. Their conservative mindset favors savings over risk-taking, limiting their ability to grow wealth.

Lessons for Aspiring Wealth Creators

While the strategies of the rich may seem inaccessible, they offer valuable lessons for anyone aspiring to grow their wealth:

1. Invest in Financial Education: Understanding how money works is the first step toward financial success. Books, courses, and mentors can provide valuable insights into wealth creation.
2. Borrow Wisely: Debt is not inherently bad. When used for productive purposes, it can be a powerful tool for financial growth. Always evaluate the potential return on investment before borrowing.
3. Focus on Productive Assets: Avoid borrowing for liabilities that do not generate income. Instead, invest in assets that create long-term wealth.
4. Balance Risk and Security: While risk is essential for growth, it should be calculated and manageable. Diversify investments to minimize potential losses.
5. Think Long-Term: Wealth creation requires patience and a long-term perspective. Avoid short-term gratification and focus on building sustainable financial growth.

The Irony of Wealth Creation

The financial ecosystem thrives on the irony that the rich borrow money while the middle class saves. The middle class provides banks with the capital that the rich use to grow their wealth. By depositing their hard-earned money in savings accounts and fixed deposits, middle-class individuals enable banks to lend to wealthy borrowers, who then generate even more wealth.

This system highlights the importance of financial literacy and the need for a paradigm shift in the middle class’s approach to money. Instead of merely saving, individuals should explore opportunities to invest and grow their wealth.

Final Thoughts

The financial strategies of the rich and the middle class illustrate the power of money as a tool for wealth creation. Rich individuals understand that money generates more money, leveraging debt and investments to amplify their wealth. In contrast, the middle class often prioritizes security over growth, relying on savings that barely keep up with inflation.

While borrowing money comes with risks, it also offers opportunities for those who know how to manage it effectively. By adopting the rich’s mindset and investing in financial education, aspiring wealth creators can break free from the cycle of savings and embrace a future of financial growth.

The irony of borrowing and saving underscores a fundamental truth: it is not how much money you have, but how you use it that determines your financial success.

Disclaimer: This article is for informational purposes only. Financial decisions should be made based on individual circumstances and with the guidance of a qualified financial advisor.