Managing Personal Finance

The Covid-19 pandemic has disrupted economies around the world and Uganda’s has not been spared. While the most noticeable effects of the disease have been the number of infections and number of deaths, the economic consequences of the pandemic cannot be overlooked.

In Uganda, the impact on many businesses has been catastrophic. There have been severe losses in business that have led to a collapse of some business entities, failure to pay back loans and loss of jobs.  To those that have been lucky enough to retain income streams, there is need to pay attention to management of personal finances. 

Managing personal finance is an oft-repeated discussion, but it remains ever relevant. In their articles on personal finance, Number Direct and Credit Nirvana share the following tips:

List down your financial goals.

Take some time to write specific, long-term financial goals. All of these goals will affect how you plan your finances. For example, your goal to retire early may depend on how well you save your money now. Other goals, including land ownership, starting a family, relocating, decreasing on expenditures will all be affected by how you manage your finances.

Once you have written down your financial goals, prioritize them. This process ensures that you are paying the most attention to the ones that are of the highest importance to you.                                                                              

A long-term goal like saving for retirement requires you to work towards it while also working on your other goals.

Draw up a Plan.

A financial plan is essential in helping you reach your financial goals. The plan should have multiple steps or milestones.

Keep steadily working towards your long-term goals but also start to focus on the most important short-term goals you have set for yourself. Your goals, along with an emergency fund, will help you stop making financial decisions based on fear and help you get control of your situation.

Create and stick to a Budget.

Your budget is one of the biggest tools that will help you succeed financially. It allows you to create a spending plan so you can allocate your money in a way that will help you to reach your goals.

A budget will also help you decide how to spend your money over the coming months and years. Without the plan and budget, you might spend cash on things that seem important now, but don’t offer much in terms of enhancing your future. If you are married, you and your spouse need to work together on the budget. Working together makes it feels fair to both of you, and you both have the same level of commitment towards achieving it. This unity can go a long way towards helping you prevent money-related arguments.

Feel free to ask for financial advice.

Once you have grown your savings and want to begin investing to increase your wealth, speak to a financial planner/adviser to help you make wise investment decisions.

A good adviser will share the risks involved in each investment and help you find products that match your comfort level and investing return needs while helping you work toward your goals as quickly as possible.

If your parents or other family members have been successful in some business ventures, consider asking them for help, and talking to them about what worked for them financially and what they would have done differently.

Invest in yourself and your financial future so that you won’t ever need to worry about your finances again.

Pay off debt.

Debt is a huge obstacle for many when it comes to reaching financial goals, where possible avoid incurring debts. If you have acquired a debt, set up a debt elimination plan to help you pay it off more quickly. For example, Look for areas in which you can cut your budget to increase the cash available for your debt payments.

Once you are totally out of debt, commit to staying out of debt. Save up an extra emergency fund to cover unexpected expenses, so you aren’t tempted to acquire another loan.