Financial survival tips in emergency situations  

 

By Sylvia Juuko  

 

The importance of having a robust emergency fund makes perfect sense in the current environment.

In my article last month, I reminded income earners that having at least six months to a year's equivalent of living expenses tucked away for emergencies saves you the anxiety in times like these. 

 

The challenge with the prevailing COVID-19 pandemic is that it is unclear when this emergency will tail off.

Nonetheless, while you cannot predict the end, you are in a better position to minimise the impact this will have on your household if you have a savings cushion and at the same time ensure that you make smart financial decisions during this period. 

 

Typically, the prevailing environment hits hardest those who are living hand to mouth, and these comprise the majority of our wage earners.

Equally, those at risk are the steady income earners category who are one pay-check away from poverty. Any emergency situation will set them back financially. 

 

The other categories that earn reasonable income will also be affected by the effect of this pandemic because people tend to make irrational decisions during times of uncertainty.

What is certain is that whenever there is a disruption in travel/movement of human traffic, goods, and services, the consequences as explained by the Central Bank of Uganda and the finance ministry is that income for the country, businesses and individuals, suffers. Consequently, this comes with drastic adjustment measures that may result in income losses. 

 

With the foregoing, what we need to do at the household level is to figure out the best financial survival guide that will make us outlast the pandemic and the attendant effects.

One key survival technique is to quit blaming everyone, but yourself. Apportioning blame at this point in time is meaningless. 

 

Your efforts should be prioritising measures to deal with the prevailing situation. What can work is to rely on support groups that have authentic information.

As it is, the Ministry of Health has issued guidelines regarding dealing with the COVID-19 pandemic. Critical to that is the heightened hygiene and social distancing. 

 

This means there will be situations where you will be confined at home. All these measures require money to be able to soften the impact this newly adopted lifestyle will bring. 

 

Realistically, dealing with this situation requires having your wits about you and making rational financial decisions, among a plethora of choices that need to be made to deal with an evolving situation. 

 

Given the flurry messages, particularly the unsolicited, we need to be cautious about the sources of information, particularly when they have health and financial implications. 

 

Inevitably, many unscrupulous business people are on the rise to take advantage of the situation and cheat unsuspecting and anxious customers. Therefore, it is important to remember that whichever financial state you are in right now, how you react to the current situation will make a difference. 

 

Regarding personal finances, this is a time to apply the knowledge that you have acquired over time. If you have an emergency fund, you have to make lifestyle changes that will initially be uncomfortable. At the same time, you have to figure out what the priorities are to ensure the fund does not run out in a few days. 

 

The funds have to be comprised of assets that can be liquidated quickly, to respond to a need. The next step is to review your expenses and identify the changes that need to be made. Remember, you will have more time on your hands, so avoid finding excuses to purchase stuff that you do not want but think you need. 

 

Whenever you assess the household expenses, one item that takes lion's share are the groceries. Therefore, you have to balance between bulk purchases for items that have a long shelf life with the perishables that need to be purchased on a weekly basis. 

 

This can be managed more smoothly if you make meal plans for the week, so that you leave no room for waste. With this level of organisation, you are saved the panic buying that has currently gripped the population. More to that, continue to audit your lifestyle to identify the areas that make spending inevitable.

On one hand, limited movement will save costs related to entertainment, fuel or transport for the nonessential travels to different destinations. 

 

On the other hand, large numbers staying at home can push up costs of utilities while most households will register increased consumption of food. 

 

Inevitably, the cost of most items will rise, further straining your budget. Therefore, it is up to individual households to figure out how to best manage the consumption without being too restrictive on diets.

Regarding keeping the household occupied, you are advised to draw schedules for different activities, so that the children are meaningfully engaged during the school break. 

 

Schedules of chores, homework, screen times and a number of activities should be drawn and each individual assigned tasks to keep them not only occupied but keep their brains stimulated. Where applicable, outdoor activities within the confines of the compound should be encouraged. 

 

Lastly, one of the biggest challenges in a situation where money is tight is managing to meet your debt obligations. Most income earners borrow for productive purposes or simply to subsist. Others are servicing loans. This is a time to have a discussion with your financial service provider regarding how to manage your obligations. 

 

Ideally, the rule of thumb is not to borrow for consumption during uncertain times because you are making a bad situation worse. However, for some income earners, borrowing is usually the available option to make ends meet. 

 

All in all, it is important we stick to the issued guidelines from the Ministry of Health, engage the household in activities that manage to keep the individual's brain and body active and at the same time make rational financial decisions that are not detrimental to the survival of our households.