Tag costs to your resolutions

The first time Jonan Tumukunde and I have a talk about his 2018 resolutions, he goes and on about how he wants to be a better son and spend more time with his siblings. But most importantly, we have a deeper conversation about his financial changes for the year. It is until I ask if he has thought about the cost that comes with his resolutions that he stops talking for a while.

“What do you mean by cost?” he asks.
He admits to being in the habit of making financial resolution year in year out. While some people succeed at sticking to their resolutions, Mr Tumukunde has over the years failed to follow through with his changes.

“I usually lose track or get other priorities or some things do not go as planned and I opt for a plan B,” he jokes.
This year, Mr Tumukunde wants to read one financial self-help book every two months, save at least 50 per cent of his salary and track his expenditure using personal finance software.

He is also particular about creating a plan to handle his finances well, set short-term goals and lay a foundation for long-term goals.
It might not make him a millionaire for now but he says he plans to start up a business to supplement his income.
“Actually, they are two startups,” he says. “One for the first half of the year. The other is for the second half. The first is the cake business and the other photography.”

Asked whether he thought about the cost of his resolutions while making 2018 changes, a not very certain Tumukunde says, “Yeah...ish ish (to some extent).”
After a bit of contemplation, he seems to think cost is a big factor and so does Mr Ronald Mukasa, the business development manager at Enterprise Uganda.

Mr Mukasa says resolutions cost money hence it is important to tie the money to the resolution, whichever way you look at it.
If you resolve to travel the world, attend a fitness programme, study a master’s degree or even buy one newspaper every day, you have to find money to pay.

Money as a resolution
Ugandans make several resolutions about relationships, family, fun, educations but according to finance experts, the money resolution must make it to this list.
“You have to make resolutions on your income. Make a resolution that you want to double it and how you will do it,” Mr Mukasa says. If you are not making this resolution, you may be missing out on the benefits of choosing a direction towards growing your income.

“It is important to have the resolutions but absolutely make sure you set a goal which is challenging and realistic. In the absence of a goal, success becomes difficult because you do not know where you are going.”

For instance, do you have a source of income? If you are not saving away some money, you are hardly paying yourself, experts say.
Mr Mukasa notes that when you resolve to save, you are indirectly making a resolution on expenditure.
He says, “If you earn Sh1m and resolve to save Shs200,000, it means you are only spending Shs800,000 so you are limiting expenses.”

With saving, comes the possibility of a resolution on creating a side stream of income. It is then that you answer the question on whether to buy a plot of land, start a business or buy shares in a company.
“It is important to tie the money to the resolution,” he says.

Bearing hidden cost
Now that resolutions will cost you, as an ambitious game changer, Mr Mukasa says finding out how much the resolution would cost, can go a long way in pushing your financial goal. For instance, Mr Tumukunde is still doing a market survey for the cake business that might cost him at least Shs2m for what he terms as a “high class startup” or Shs800,000 for a local oven that uses firewood.

There is always the exciting sensation that comes along with pursuing a master’s degree, at least for two year old graduates. But with the thrill aside, you have to clearly point out the tuition fees and other costs including transport to the university.

Grocery owner Catherine Kyarisima has resolved to save Shs400,000 a month and live healthier by having fruits in her fridge all the time. But she has one problem.
“I do not know where to cut costs to make up for the new ones,” she admits.
Mr Mukasa says taking this cost into consideration enables you to determine whether your salary can pay for it or if you have to take out a loan.

“If you have to pay Shs5m for your Master’s degree and your salary is Shs500,000, you need to be very careful before you pick those application forms and pay fees. Ask yourself which other places can you get an income and this will inform whether you have to look for a second job or take out some credit,” he explains.

A resolution has the power to get your financial plans done because they create a sense of urgency. But is it achievable?
Personal finance experts say if the answer is negative, you have to return to the resolution and modify the financial goal.

Hidden costs
Some resolutions often involve taking on more stuff. But when you take on more commitments or make changes to your life, you can make yourself less productive, because there are some hidden costs associated with those changes, such as how much time, willpower and motivation they can eat up.