If you’ve been in Lebanon for the past two years, there’s no need to elaborate on why it can seem impossible to save money. From the banking crisis that hit in October 2019, the pandemic, the August 4 tragedy to Lebanon’s ongoing inflation catastrophe, cash is as rare as stability. You’ve probably already noticed everything around you change at a high speed. Consumer prices are exorbitant, product quality and availability decreased, and the services sector which once used to be the backbone of the country’s economy, is now in a prolonged coma. All indicators that the road ahead is still very bumpy and full of potholes. 

 

But in a country like Lebanon, the only way to some sort of stability is, you guessed it, money. Read our tips on how to make the best of what you already have and protect yourself from what’s to come.  

 

1. Budget & Downsize Your Lifestyle  

Your financial safety, although heavily influenced by external factors, partly depends on your awareness of your financial situation. That is why it’s incredibly important to keep track of all your earnings and expenses, and figure out where changes can be made. Once you have a clear idea of the money coming in and going out, you can prepare a detailed monthly budget detailing your spending on food, rent, bills, recreation and so on. Furthermore, having a clear plan for how you’re going to spend your money allows you to identify ways to cut your spending. In a time of open-ended crisis, living more frugally usually happens naturally. But you can also benefit from taking proactive steps to cut back. If you’re spending most of your time at home due to COVID-19, consider cancelling your mobile data subscription for example. These small steps may feel like homework, but they are key to recession proof living.  

 

2. Minimize Debt  

If you have debts, get in touch with your bank and agree on paying off the minimums. Under normal circumstances, getting rid of your debt should be your top priority. But in financial survival mode and a liquidity crisis, cash is king. Would you rather have no debt but also no cash for bills, food and rent, or would you rather have some debt and cash for your expenses? Another important step to take is to avoid accumulating additional debt. In line with your budget, try not to spend money on secondary things using credit cards, which you’ll have to repay later with interest.  

 

3. Diversify Your Income  

If your job managed to survive the mass layoffs that took over the country this year, you still can’t solely rely on your salary to meet your financial obligations, let alone ensure your financial security. With Lebanon’s growing unemployment rates, putting all your eggs in one basket would be unwise to say the least. However, diversifying your income doesn’t necessarily mean you have to get a second job (if you can find one). If you have any skills outside of the industry you’re employed in, you can spread your wings and reel in additional income through freelance work for example. You can also rent out an empty room in your home, or even rent out your secondary residence if you have one. Multiplying your streams of income is a safeguard against unemployment, but is also an opportunity to generate extra cash to save and invest.  

 

4. Invest Wisely & Collect Dividends  

Another way to diversify your income is to invest. Investing is one of the most profitable ways to keep your money out of the bank, and you can use your dividends to make other investments, or just save them for a rainy day. And international investments are one of the best ways to reduce your financial vulnerability in Lebanon’s financial crisis.  

At Brakket Invest, we offer you the opportunity to invest in funds in Europe and the MENA region, in green energy, startups, real estate, finance, and services, and without making a single international investment. With a safe and well diversified portfolio, it’s easier to get your blocked money out of the country while collecting regular returns on your investment.  

 

5. Revisit Your Financial Plan  

Financial planning should be higher up in your list of priorities, alongside budgeting and downsizing. If you’ve already set a long term financial plan, now is the time to go through it again and make sure that it aligns with your current income and expenses, as well as your needs. But more importantly, if you don’t have a financial plan yet, consider making it your top priority. Unlike monthly budgeting and spending plans, your financial plan outlines your entire financial situation to pinpoint where you currently are, and how you can reach your short-term and long-term goals. If you’re unsure how to set up your financial plan, our advisors can help you.  

 

Interested in getting your cash safely out of Lebanon? Get in touch with Brakket Invest.