Kenyans across the country find themselves caught amid tough economic times. Rising inflation, unemployment, and limited access to credit are just a few of the hurdles that make survival seem like an uphill battle.

The rising taxes and high cost of living has left many unable to meet their basic needs. As the price of goods and services rises, many Kenyans are left unable to cope. For instance, the cost of food increased by 8.60 percent in July of 2023, which means you will have to spend more.

The cost of transportation has also increased by 30%. This has affected many Kenyans especially those living in urban towns and depend on public service vehicles.

Despite the burden of hard economic times, there are several practical strategies you can use to survive and thrive during these tough times. Here are some strategies you can adopt:

1. 1. Strategic budgeting

Did you know that 67% of people who budget feel more in control of their finances?

Simply put, a budget is a list of all your income and expenses. Before you can do anything, you must know how much money you make (income) and how much you spend (expense).

Knowing your income is easy because it includes salaries & wages, profit from sales, income from investments, pension, and retirement benefits.

You can allocate your spending on essentials such as rent, food, and transport. You should also know how much money you spend on discretionary expenses (non-essentials) such as entertainment, gym.

After knowing where your money goes, you can devise ways to cut spending and put more money towards savings.

The best way to create a budget is to use the 50, 30, 20 rule, which is the sum of all your income.

50: This consists of your basic needs/fixed expenses e.g. rent

30: This covers all your wants or discretionary expenses such as entertainment.

20: This is the percentage that should go towards your savings.

To learn more on how to create a financial plan/budget and get a free template to get started click here

2. Side Hustle: Embrace other income opportunities.

With the cost-of-living skyrocketing, many of us are feeling the pinch as we are unable to pay all our bills. While many families are still getting over the loss of income caused by the Covid-19 pandemic, the recent increases in gas and food prices can feel especially difficult to handle right now.

One way to keep up is to get a side gig/hustle such as starting a small-scale business, freelancing, or utilizing online platforms to offer services.

Over 40% of Kenyans are involved in some form of self-employment, making it a proven path to supplementing your income.

3. Maximize your savings.

To survive the hard economic times, you should cut wasteful spending and make some savings. Experts advise that you set aside at least 20% of your monthly income for savings. You should be able to get by on the savings during tough times.

Many Kenyans still struggle to save while it is also getting increasingly difficult for consumers to make their salaries last until the last payday.

Savings enables individuals and families to easily access funds to cover crucial needs such as medical expenses.

Making wise purchases is one way to save some money. By adopting strategic purchasing habits, such as using coupons, getting discounts, and taking advantage of special deals, you can dramatically lower spending and put more money aside for savings.

It is estimated that shoppers who use coupons save up to 30% on groceries and household items.

In hard economic times, if you have savings, you can avoid getting into debt or relying on high-interest credit choices.

4. Learn new skills.

Did you know that people who develop multiple skills are 50% more likely to adapt to changing economic circumstances?

Acquiring new skills can lead to better opportunities. Investing in education and training to acquire new abilities can bolster employability and income potential.

Most people are finding a ‘side hustle’ by learning new skills online and offering their services remotely. 

5. Chamas

A Chama is a micro-saving society that groups of Kenyans use to pool savings. These savings groups foster mutual support and provide a platform for disciplined savings.

Kenyans have benefited greatly from chamas in hard economic times. For example, many of Kenya’s informal retailers had to shut down in the 1990s as the cost of their suppliers increased. Chamas were useful in coping with price increases as they pooled resources and imported their own supplies.

6. Responsible borrowing

In challenging times, a well-considered loan can provide a lifeline. Research and choose reputable microfinance institutions for loans tailored to your needs. You can take a loan and start a small business to add an extra income or just to keep up with bills as you find alternatives.

Microfinance such as Ngao Credit offers secure loans based on the security of your car. You can take a logbook loan of up to Kes 4 million to keep your business afloat and repay in 24 months.

7. Build an Emergency Fund

Having an emergency fund is crucial to weathering financial uncertainties. You can allocate a portion of your income towards an emergency fund, which acts as a safety net during unexpected expenses or income disruptions. By saving consistently, you can avoid falling into debt and maintain stability during tough times.

8. Bulk shopping

One of the most significant benefits of bulk purchasing is the potential cost reduction. When you buy in bulk, you can get a lower per-unit price than if you bought individual things.

This is because wholesale items sold in large quantities are always cheaper than their retail price.

Conclusion: Thriving Amidst Challenges

While Kenya’s economic landscape may be challenging now due to the high cost of living, using these proven strategies can empower individuals to confidently navigate difficult times.

By strategically budgeting, diversifying income, making informed purchases, continuously learning, and engaging in collaborative savings and responsible savings. Kenyans can strengthen their financial well-being and embrace the road to economic resilience.

The journey toward financial prosperity starts with these simple actionable steps.