Managing money in a Pandemic. Panic not.

I am working from home surrounded by domestic noises and needs. The roads are relatively empty. Many pedestrians are in masks which pretty often, don’t cover their noses and mouths. Supermarkets have social distancing rules. Luxuries tend to be missing from those shopping baskets.

I am a Financial consultant. I discuss Financial matters on webinars titled “Money Matters with Melvin” on Zoom, Facebook Live or Google Hang-outs. My current and potential clients from the US, Canada and Kenya are cautious spenders in this season. One such potential client, Wanja works 16 – 18 Hours a day in an old people’s home, in North America. She makes three times double the pre Covid 19 hourly wage, for this job. The work is hard. She hardly sleeps. She asks “Is this the best time to invest in Kenya?Friends and family have often conned me of my hard earned cash”. I respond “The demands from friends and extended family, in this country, for financial support, at this time, have been hitting you with increasing regularity. Why not open a money market fund, which you can regularly draw down, say once a month, as part of your family social responsibility?”

I go on to add “If you have been living in the US  without the right papers you could be on your way back home, on a one way ticket, as soon as this COVID 19 blows over. You will need opportunity, sink and emergency funds to re-integrate into the Kenyan economy. What better place to keep these funds than Money market funds (with no lower limit) and/or Wealth Management funds (if you have USD 10,000 or more sitting abroad).”

I throw in my final submission “This might just be the right time to consolidate your savings and investments and rationalize your investment portfolio. You could also take a Life Insurance policy to cushion you against Income Tax.”

The times have changed. All of the above might sound academic if you have been laid off, if you have taken a pay cut or are simply not turning over enough cash like my friend Peter who used to sell second hand duvets in a low-income Nairobi neighborhood. We are no longer importing second hand clothes to Kenya. Another such friend is Julius, who is a bus driver in Nairobi (now off work because social distancing rules in public transport and few commuters have made it uneconomical to have a bus on the roads).Paul and Julius ask “How do we save at this time?” I give them my intelligent Financial Consultant look and quip “You need now, more than ever before, to stick to a strict domestic budget because that seems to be the sink hole where most employment, business  and passive incomes in Kenyan households seem to find their way.” I quickly share a word document screen on my Zoom presentation and break down what an after tax monthly domestic budget should have looked like in pre-curfew days.

·         Tithe/Charity     10%

·         Education            20%

·         Rent/Mortgage 15%

·         Clothes                    5%

·         Food                      10%

·         Medical                10%

·         Entertainment  10%

·         Savings                 10%

·         Investment        10%

Now that we have a curfew we must re-arrange these numbers and note that support to family and friends has to come out of that 10% entertainment budget that you can see above.

If you have read thus far you may want to ask some of the questions that Wanja, Paul and Julius did not ask. Why not? Just drop me a call, a what’s app message or email me because none of us can know everything about making and managing money. I am slightly ahead of most.

Dr Melvin D’lima

April 28 2020

Nairobi Kenya

Tel:0720297433

Email:melvindlima1@gmail.com