I’ve lost my Sh114,000 job; how can I survive and sustain the soft life I have been living?

Losing a job, particularly in tough economic times, can be disheartening. However, it’s essential to remain composed and work on a strategic recovery plan.

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My name is Joy. I lost my job about a week ago. I live in Nairobi and was earning Sh114,000 per month. Currently, I have savings of Sh1.8 million, but I’m unsure of my next steps.

My monthly expenses are as follows: rent (Sh19,000), shopping and groceries (Sh20,000), chama (Sh6,000), son’s school fees (Sh10,000), salon and clothes (Sh20,000), fuel (Sh6,000), house-help (Sh12,000), pay TV and internet (Sh5,000), power and water (Sh4,500), with the balance going to miscellaneous expenses.

I’m part of a chama with 10 members, and we’ve bought parcels of land, aiming to subdivide them into three plots per member by April.

I’m considering selling my plots for between Sh400,000 and Sh600,000 and using the proceeds, along with my savings, to start a business. However, I don’t know what type of business to pursue. Losing my job has left me disoriented—I never imagined this could happen, especially with my competitive Master’s degree.

I’m worried about how to maintain my lifestyle without appearing as though I’ve hit rock bottom. Before losing my job, I dreamed of owning a home, either through an off-plan purchase or a mortgage. Now, I’m uncertain if this is achievable. How can I bounce back?

Expert advice from Chacha Nyaigoti Bichang’a: Financial coach at Chachanomics Consulting Firm and author of Mastering Your Money

Losing a job, particularly in tough economic times, can be disheartening. However, it’s essential to remain composed and work on a strategic recovery plan. Here’s a multi-faceted approach to regain financial stability:

1. Calculate your networth

Start by assessing your actual financial position—your assets minus liabilities. Fortunately, you appear to have no liabilities, which gives you a positive net worth.

Your current assets include savings of Sh1.8 million and fixed assets like your car and the land owned through your chama. These can generate cash flow over time if liquidated. Non-financial assets, such as your free time, laptop, internet access, Master’s degree, and skills, can also be leveraged to create income streams.

2. Create a crisis budget

Re-evaluate your monthly expenses and trim unnecessary costs:

  • Rent (Sh19,000): This exceeds the recommended 15% of your income. Consider relocating to a cheaper house at Sh10,000 to save Sh9,000.
  • Shopping and groceries (Sh20,000): Halve this amount to Sh10,000 by practising frugality and buying in bulk.
  • Chama (Sh6,000): Retain this only if it adds value through returns. Otherwise, redirect the funds.
  • School fees (Sh10,000): Move your son to a more affordable private or public school temporarily.
  • House-help (Sh12,000): Replace full-time help with occasional services from a cleaner, saving Sh5,000.
  • Fuel (Sh6,000): Minimise or eliminate car use for now. Alternatively, convert your car into a taxi for additional income.
  • Salon and clothes (Sh20,000): Cut back significantly by reducing salon visits and pausing clothes shopping for six months.
  • Pay TV and internet (Sh5,000): Opt for free-to-air channels or cheaper packages to save Sh2,500.
  • Power and water (Sh4,500): Reduce this to Sh2,500 by practising energy and water conservation.
  • Miscellaneous (Sh11,500): Track and reduce this category, potentially saving Sh10,000.

These adjustments could save you approximately Sh71,500 monthly, leaving Sh42,500 for essential expenses.

3. Invest your savings for cash flow

Redirect your Sh1.8 million savings into income-generating financial vehicles:

  • Deposit Sh500,000 into a money market fund for immediate liquidity.
  • Invest Sh1.3 million in an infrastructure bond with a 16 percent return, yielding Sh104,000 biannually.
  • Sell your three plots for an estimated Sh1.5 million and reinvest in higher-yield options like infrastructure bonds for guaranteed passive income.

Delay purchasing a home until your finances stabilise.

4. Start a side hustle and job search

Leverage your skills and resources for part-time work, such as consultancy or teaching. Apply to organisations that align with your expertise and consider voluntary work to build networks. Online gigs can also provide supplemental income.

5. Engage a financial coach

A financial coach can help you navigate this transition, offering guidance on budgeting, investing, and conducting due diligence for new opportunities.

You’ve faced a significant setback, but it’s also a chance to regroup and emerge stronger. Adopt these strategies, stay determined, and rebuild your financial foundation. Remember, resilience is key.

If you have any money problems, or if you’d like advice on managing your finances, feel free to get in touch at [email protected].

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