2019 will not be any better as many hope, this is how to prepare for hard economic times this year.

By Ephraim Njega via Facebook

I know I have discussed many times about how one can prepare for hard economic times but that question keeps on coming. For a reminder these are some of the things you can do;

1. Hold onto cash or invest in liquid assets. You can sell some illiquid assets such as property in favour of cash holding. The saying cash is king is never truer than in times of economic crisis. You can be asset rich but cash poor. It will be hard to sell assets when everyone else is doing the same.

2. Prepare for an alternative lifestyle. For instance, if you have an upcountry home and land start working on a possibility of moving there should it get to that. There is nothing shameful about retreating upcountry in order to regroup financially. This should always be part of the plan.

3. Save as much as you can. Cut spending and downgrade your lifestyle in favour of saving more. Treat every shilling you earn as if it is the last. That way, you avoid forward and impulsive consumption. Have spending plans and stick to them.

4. On the extreme, you can also convert some shillings into dollars to hedge against forex risks.

5. Keep records of your income and expenses. This is the best way to control spending and cut excess fat. You will never succeed in managing personal finances without accurate data on your spending habits.

It is clear this corrupt, clueless and incompetent government will not own up to its economic errors soon. The best thing is to protect yourself against possible economic meltdown. At the moment, only a miracle can prevent that from happening. We are on a sure path to economic ruin.


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