Now that you have already settled into the new year, you should start looking to grow your investment portfolio, to pay down your debt and save for the future. Time is money something you should remember, and every day gone is another day missed to get you on track financially.
Here are some powerful personal finance trends of 2017 along with important changes to look out for, remember, as you make your financial goals you are merely taking advantage of the several opportunities to improve your life.
The following are some trends (some old, some new) you can expect this year that could impact your finances directly or indirectly.
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.
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.
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, having 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 use to make decisions on whether to lend or not and at what rate. Unpaid utility bills will lower your credit rating and limit your access to credit when needed .
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.
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.
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 though it may be expensive to travel this year.
What to do: If the Kenyan Shilling does not rebound against the U.S Dollar in 2017, you can bet 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.
By taking advantage of the positive trends, and avoiding those that could hurt your finances, you can significantly improve your bottom line. Start by looking for banking and insurance products that can help you save and invest your money. Ultimately, your financial well-being this year depends on how intelligent you are with managing your finances.
