How to make compensation cash last a lifetime
Early this week, residents of Pangani Estate woke up to bulldozers pulling down structures that they had called home for years.
The City Hall moved to demolish the houses on Monday night to pave way for the construction of modern low-cost apartments, an incident that looked inhumane from the County government.
However, it later emerged that the residents had been compensated for the houses and ordered to shift to other residential areas, which they ignored.
Apart from this incident, it happens that several people compensated by insurance firms for accidents or certain losses end up squandering their money and not using it appropriately for the purpose it is intended.
They sometimes end up poor without a proper record on how they spent the money.
According to claims experts, once you get compensation money for whatever reason, it is important to use it for the intended reason before thinking of spending the “free” money.
For instance, in case you are retrenched, invest the money in a venture that will give you income until you find a new job, or expand the venture to even become an employer.
If you get compensation for eviction, find a new residence as soon as possible, and do not wait for that bulldozer to start lamenting.
“Big” money tends to create a sort of emotional instability among low income earners, so spending should not be the priority for such people, or for anybody. It is good to plan first and set your priorities right.
This way, you’ll be able to budget the money well without a rush that would see you in a financial pitfall.
You might not be able to exhaust all the compensation money in the intended purpose.
For instance, Pangani residents were paid Sh600,000 to shift to other residential areas, according to Governor Mike Sonko.
This cannot all be used to get a residential rental house. In fact, only a sixth of the amount is enough to shift.
This in mind, you can use the remaining amount to start a business that will support you henceforth. If you are employed, it could be your side hustle, and if you are in business, this could be an opportunity for you to expand your venture.
It is also important that you involve your family in key decision making about such money. Some people tend to “disappear” from home when they get the money, only to reappear after all the money is spent, of course with regrets.