According to the Business Daily, 1.7m employees have lost their jobs since March 2020, when Kenya imposed a lockdown due to COVID-19. If you lost your source of income during this period, here are six tips to help plan your finances while you search for another source of income.

1. Calculate your financial runway

Runway refers to the amount of time you have until you run out of money. If you have income or savings worth KES 400,000 and have expenses worth KES 50,000 per month, your runway is eight months. To calculate your runway, identify all sources of revenue and expenditure over the period. Your income includes redundancy cheques, payoffs, savings, and income from your investments and side hustles. Your runway determines how long you have before you need to get another source of income.

2. Downsize and reduce expenditure

To extend your runway, consider downsizing. Downsizing involves reducing costs even on essential items like food, school fees, rent/mortgage and transport. Instead of going out, cook at home and carry leftovers for lunch. Sending your kids to more affordable schools, moving to a smaller house and using one car instead of two can also save money and extend your runway. Reduce your spend depending on the circumstances of your family and your financial needs. Do what is right for you and your family regardless of what people think.

3. Reach out to your creditors

Ignoring the debts won’t make them go away. Engage your creditors before you miss a payment and negotiate a payment plan. Reaching out shows goodwill and will ultimately result in a reduction of stress and anxiety for you by opening up payment options for you. Financial institutions are offering opportunities to help ease the burden for their customers during this pandemic. Talk to your creditors about grace periods, extensions, reduced repayments, waivers or consolidation. Any amount you can reduce will extend your runway.

Remember, these options are only restructuring your debt. The debt won’t go away and in some instances, may even become more expensive. Confirm that the numbers make sense before you sign on the dotted line. How much does it cost to extend your repayment period by 12 months? Once you have agreed on a repayment schedule, execute on the plan. “Dawa ya deni ni kulipa”.

It goes without saying that this is the worst time for you to start taking loans. If you don’t have debts, don’t start now. Manage with the little you have and work out a plan to get more income.

4. Negotiate payment periods with suppliers

To ease the pressure of paying all your bills at the beginning of the month, negotiate payment periods with creditors and suppliers. An interest-free credit period gives you time to make the payments. It doesn’t reduce the debt/expense but gives you more flexibility on the timing of the payments. You can pay school fees monthly instead of in full at the beginning of the term. If you pay your rent at the beginning of the month, negotiate to make payments within the month instead to give you more time to accumulate the rent.

5. Generate Revenue

If you don’t have enough runway, don’t sit at home waiting for the perfect opportunity. You can still earn money.

• Freelance: Translation, transcribing, writing papers, and conducting product reviews are easy ways for you to generate income. With a computer and access to the Internet, you can get started today.
• Consultancy and part-time work: Turn your work experience and specific skills into consultancies and a part-time job. Connect with and engage your network for opportunities.
• Start a business: This may be the ideal time to start a business. Identify a gap and fill it. Your hobby or skill can be a revenue earner for you and your family. Don’t be afraid to start small and do something different.
• Liquidate some assets: As a last resort, sell some assets. You could sell things around the house or liquidate an investment. The idea is to generate cash to tide you over until you find another source of income.

6. Don’t bind your choices by what people will think unless you’re deciding to do something illegal or unethical.

Easier said than done, I know. But like it or not, you’re struggling financially and what matters is how you come out of it and not what people think. Whether you choose to downsize or start selling chapatis, you’re the only one who has to live with your choices. If you’re always thinking about what your peers, family, will think, you’ll find it difficult to let go of that car, find new ways to earn or change schools for your children. In the end, you’ll still have debts, no money and more stress. What matters in such a time is your family and their wellbeing. Please do what you need to do, legally and ethically, to keep a roof over their heads, clothes on their backs and food in their stomachs.

Losing your source of income is tough. However, with a little planning, you can ride out the storm and still come out on top. You may even pick up a few habits that will improve your financial health in the long run. You’ve got this.