HomeStandard PeopleGrooming With Heather: How to survive the liquidity crisis

Grooming With Heather: How to survive the liquidity crisis

The only problem is, as a nation, we are not exporting sufficient goods in order to bring in adequate American dollars to sustain our liquidity needs hence we are experiencing problems. Though our economy is growing it is not growing fast enough to cope with the nation’s financial demands.

I approached a local economist to ask for advice on how a Zimbabwean household can survive this liquidity crunch. He mentioned that most of our families are not adjusting to the current economic situation and are therefore doing whatever they can to sustain their previous lifestyles.

A good number of households are being sustained by debt that they are unable to service and are therefore drowning. In order to acquire goods like televisions, cars and even clothes people are opting for lines of credit as they cannot afford to pay for these items upfront. School fees and utility bills are wreaking havoc on the finances of households resulting in several homes having their electricity or water turned off or parents selling cars, houses or taking out loans just to send children to school. In the event that a parent defaults on a loan, they lose their collateral, which is usually their home, plunging the family into further dire financial straits. If one must take out a loan it would be wise to do it for purposes of generating income, for instance, a viable business opportunity. The interest payments plus the loan repayments can put further strain on an already strained financial situation. Banks are currently charging between 15% and 20% interest which is not cheap.

Should the head of the household decide to maintain the previous lifestyle they should find a legal way of increasing income instead of increasing liabilities as that improves liquidity in the short-term and cause financial stress in the long-term.

The best way to survive this liquidity crunch with the least financial stress is to control household expenditure.


A lot of families owned several cars but of late they have been selling these cars in order to pay for their children’s university or school fees. They will sell a Mercedes Benz in order to purchase a smaller car that has good fuel consumption and is a lot more affordable to maintain. Families can also carpool; instead of husband and wife each taking their own car to work, they can share a car thereby reducing the fuel costs of the household. The savings may not seem significant over one day but after a month the savings add up.

The reason cost of our utilities is high, for instance our electricity bills, is that the ZESA incurs high overheads in its electricity production, the highest of which are the labour overheads.   If all the households of Zimbabwe cut back on their electricity consumption by using energy-saving light bulbs and not leaving lights turned on when there is no one in the room, this would reduce all our electricity bills in the long term. The same can be applied to water and telephone bills. The economist mentioned how they did away with the landline in their home and resorted to using just their cell phones and limiting telephone conversations to those that are necessary. It actually costs less to meet up with your friends for coffee than it costs to have long conversations with each of them on the telephone.

Expenditure needs to be readjusted and reprioritised in order to cope with current economic situation. Heads of households need to be honest with themselves and their families and map a way forward that yields the most peace of mind for them.


School fees also pose a big challenge

School fees are no longer as affordable as they used to be, especially the private school fees.  Nowadays parents have to make greater sacrifices than parents had to 10 to 15 years ago. Parents are falling behind on school fees payments and their children are being send back home for non-payment of fees.  It is every parent’s dream to afford their child the best education out there.


Even in this economic crisis there are parents who can do this comfortably whilst the majority of the parents are being stretched to beyond their limits and capacity. Pre-school fees are ridiculously high with others asking for fees that are as high as US$1 000. What parents need to do is ask themselves if this level is the best level to be making such an investment considering there are four levels of education at which parents will need to invest; pre-school, primary school, secondary school and then tertiary education.


At pre-school level it would be best to invest in a less expensive school after all most children are only there for half the day. If you send your child to a less expensive school, you can put away the savings for tertiary education.

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