Here’s what you can do to survive these tough times

Due to dwindling economic fortunes, the rising cost of living and a recent review on the interest rates on loans, many financial institutions have classified low income earners as ‘risky’ and are instead showing a preference to lend civil servants whose sources of income are presumed to be more stable.

This only means that the cost of servicing a credit facility could be costlier, which calls for some austerity measures for one to survive these hard economic times. If you are the kind that found yourself in Black Books of your usual lender even though you were honouring your debt obligations on time, here are ways you can stretch that shilling until the next payday.

Seek a loan repayment review
There is a high chance you were denied that loan because another lender made a negative review of your credit score, or the bank has determined that your income is not consistent on a monthly basis because you are a freelancer, or are paid under contract by the organisation you work for. If this is the case, and you owe more than one lender, sit down and decide which debt to pay first as you work your way out of cyclic debt. You can approach the lenders and seek for a staggered debt repayment plan. This could eliminate the need to borrow from one lender to pay another.

Cut on spending
Because any rise in fuel prices has a ripple effect on all sectors of the economy, you can definitely expect the cost of food items or agricultural products to go up. You can't do away without needs like food, shelter, clothing and healthcare. Luxuries, or wants, may look enticing, but are almost always unnecessary. Would it make sense to buy customised seats for your living room when you can modify existing ones at a fraction of the cost and save money? The same goes for patronising high end joints, hotels and spending on designer things just to show off.

Kadogo economy is costly
The adage that the poor spend more than the rich is true. Manufacturers nowadays package items in small quantities to target low income earners, and this is always costlier on buyers. If you buy in bulk, you may save more. Take the example where you buy a 50-gramme sachet of cooking fat at Sh25. In a week’s time, you may have spent around Sh100 or more depending on quantity of food cooked. A 500-gramme tin of similar cooking fat may cost you around Sh160, depending on the brand, and can last close to a month. If you do similar calculations with other kadogo products, you'll realise you are spending more than if you’d have bought large quantities of a product at a go.

Change addresses
With salary deductions for things like housing levy, increased contributions to health insurance and pension fund, the monthly take home is likely to decrease. Add a host of other costs that will further decimate that salary such as mortgage payments, bank or other microfinance institution loans, and so on. In short, there will be nothing to smile about, given the fact that employers are not offering salary raises to cushion employees from the economic shocks. How about adjusting accordingly by changing your living standards?

Think of moving from that leafy address to a less costly one, and transferring the children from private to public schools. It may look like a climb down, but remember that costly neighbourhood may lead to financial ruin. What if you began using public transport or walking those short distances instead of using boda bodas? It could actually be good for your health.

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