5 Powerful Personal Finance Trends of 2017

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UPDATE: The 2017 National Budget changes the Income Tax Structure. Find out more by clicking here

The new year is finally here that means another 365 more days to grow your investment portfolio, pay down debt and save for the future. Time is money and it reflects on the past year, every day gone is another day missed to get you on track finally.

So what, here are some powerful personal finance trends of 2017 in line with the key financial changes and trends to look for in this new year – remember,  as you set your annual financial goals you are merely taking advantage of the 365 opportunities to make your life better this year.

Here is a head start , expect these trends (some old, some new) so you can better position yourself for success this year.

#1 Lower Income Taxes

The state has moved to lower income taxes, as they lessen the tax burden. Here are some of the changes:

♣ First, the state has reduced taxes in the five tax bands:

Taxable Income Tax Rate
KES. 0 – KES. 134,164 10%
KES. 134, 165 –KES. 260,567 15%
KES. 260,568 – KES. 386, 970 20%
KES. 386, 971 – KES. 513, 373 25%
KES. 513, 373 and above 30%

♣ On the other hand, 10% withholding tax on rental income will be hard to avoid and will attract penalties of 10% and 1% interest per month for every month.

What to Do: You can speak with a tax professional now regarding how any of these changes may impact your personal income tax situation (particularly when if comes to filing) so that you can plan accordingly for the year ahead.

# 2 Lower Interest Rates

Last year the interest rates dropped causing major changes in the sector. While savers now earn lower yields in their bank accounts, the lower interest rates benefit consumer borrowers with variable interest rate student loans, mortgage, car loans and credit card debt in the form of lower interest costs.

What to Do: If you have not refinanced in your fixed rate loan, you should consider doing so this year.

#3 More Avenues for Your Risk Profile Assessment

Gone are the old days where you could challenge your utility bills and even escape payment, starting 2017, unpaid water electricity and phone bills will deny you credit. The intention is to establish a basis for risk assessment related to the borrower’s character which lenders can base to make decisions on whether to lend or not and at what rate. Your character is something worth protecting and could save you a lot of money, pain, and hustle in the long run.

What to Do:  Pay all your bills on time and maintain a good credit rating. This will save you a lot of money in the long run.

#4 More Automation in Investment Portfolios

Banks and investment firms and other players in the sector have charged to automate portfolio investment and simplify the investment process for retail investors. More tax efficient, lower cost, plug and play scenarios to lower cost for the investor and increase efficient service rendering.

What to Do: As Technology and money management increase converge; expect more.  Technology will play an even bigger role this year in investing and portfolio management as the sector seeks to reduce overall cost and attract more investors.

#5 More Expensive Travel

So far, the Kenyan shilling has experienced intense pressure and is expected to fall further against the U.S Dollar in 2017. It will not only cause prices of various commodities to increase but will make it expensive to travel this year.

What to do:  If the Kenyan Shilling does not rebound against the U.S Dollar in 2017, you can go long on the U.S Dollar against Kenyan Shilling. Meanwhile, if you are looking for an international vacation destination, travel to the UK is now cheaper than it has ever been.


2017, could be the beginning of anything you want.

Happy New Year!

 

 

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.

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