Save and be safe in case of a job loss

“I don’t care about tomorrow. For me, today is the most important moment in my life, the future will take care of itself,” a woman offered during a discussion on the importance of saving for that day when things turn south.

Apparently, there are many people who reason the same way. Two months ago, a woman who believed her husband was doing very well was shocked when she went to his employer to follow up his savings after he passed away. The man was living a lie; affording the family good things on credit and when he died, he left it in deep debt.

Some women believe their money is for spending on themselves. A 24-year-old woman I talked to recently confided that she was dating three men at a go – one who pays her rent, the other takes care of her shopping while the third picks the bill for her entertainment.

“So what about yourself? Where do you take your money?” I asked.

She uses her money to show off to her friends and colleagues. When she is out with friends, she pays for their drinks and food. She wants to make a statement; that she is better than them by displaying ‘wealthy’ tendencies.

The desire to act rich and gain admiration from friends has led many to tears when they lose the short-term sanctuary of financial comfort.

Nothing is permanent. The three men the lady is dating will be gone one day. A job can be lost. Sickness can leave you without anything to hang on to.

When this happens, what will you do? For example, if you went to the office tomorrow and your boss says your services are no longer needed, what will you do?

The latter should be the concern that drives everything you do. If today you lost your job or your business, will you be able to maintain your standard of life for say six months before you get another job or grow your business to profitable levels?

As you earn your first salary or make a small profit in your business, work the figures out in such a way that you save at least a quarter of your earnings. For example, if your net earnings is Sh100,000, put aside at least Sh25,000. This amount can be put into a savings account that will cushion you from sudden loss of job or sudden illness. Part of it can also be saved in a chama, that merry-go-round our mothers or grandmothers were involved in that has these days become a greater mover of the economy.

If you are lucky and do not spend this money say in one year, you will have Sh300,000.

You can do so many things with this amount. You can start off a business on the side if you are working. If in business you can expand your business or diversify.

Always do not aspire to begin from the top. Start small and grow. If you want to go into real estate, you can combine resources with your friends and get a chunk of land. If you are five and each of you raises Sh300,000 or so, you can buy a prime piece of land in any urban area in the country. Within a very short time, this land will appreciate and you can dispose it off at a tidy profit or develop it as a company business. You can start building and selling or leasing flats on your plot. From the initial Sh300,000, you will see your value rise and gradually you will start dining with kings of the investment world. Banks will be begging you to accept their loans to develop the property.

Once you have your little savings and you see it growing each month, you can dream. Dreams that you never envisioned before.

Therefore, those who have no saving culture, should mark today as the first day in their new life of putting aside something small for either that rainy day or just to act as a springboard for financial freedom. Dream, and let your financial plan see you live it.