This archive report was first published on 6 July 2020.
As we navigate the current economic desert, it's crucial to prioritize financial planning and management. According to business trainer and author Mr. Kiunga, 'the art of entrepreneurship' requires strategic planning to succeed in a competitive market.
One key strategy is to work with a case scenario where your income falls by two-thirds and expenditure increases three times. This means providing for a worst-case scenario where you receive only one-third of your expected income and expenses triple.
For instance, if you're expecting to earn Sh300,000, plan for a scenario where you receive only Sh100,000. Similarly, if you're projecting to spend Sh300,000, prepare for a scenario where expenses shoot up to Sh900,000.
Experts advise that we tend to overestimate income and underestimate expenditure. To mitigate this, it's essential to plan in advance and adopt a zero-based budget. This involves scrutinizing every expense and questioning its essentiality.
By being mindful of our expenses and adopting a do-it-yourself policy, we can reduce our financial burden and increase our chances of success. It's also essential to align our expenses with our income to avoid unnecessary debts that can make recovery difficult when things improve.
As Mr. Kiunga emphasizes, 'budgeting is essential all the time.' It shows us where our money comes from, gives us the freedom to spend, and makes our money go further.
