While training teachers in financial literacy, most were puzzled about how to survive with inadequate incomes throughout the month. They seemed worried about the amount of money they received as salary compared to various expenses surrounding their lives.
To note, most salary earners are facing the same dilemma despite earning in thousands or millions because of lack of proper financial planning practices.
I have noticed that most salary earners spend before they earn through salary loans for investment or other expenses and individual debts to cover up for the days until pay day. Unfortunately, most money borrowed hardly brings in returns considering the reasons behind the borrowing. Some reasons include constructing residential houses, paying school fees or risking money in an investment one does not completely understand.
There is one formula that you need to know no matter if you’re earning in thousands or millions. After receiving your salary as income, save as you identify a suitable investment opportunity that can cater for your expenses. It is important to have cash inflows on daily, weekly, monthly, semi-annually or annually. With such a cash flow, it is possible to grow your income gradually; thus, living a desirable life style.
Developing a savings culture is key to achieve your financial goals. Take one step at a time. Give yourself targets of being able to save some amount of money each month and fix that amount and adhere to it. With that discipline inculcated, it will be easier to achieve bigger targets when you have more capability.
It is important to understand that savings alone will not get you out of your financial lock but identify and consult for the right investment to grow your money.
Mind your expenses
The government and some investors know what people love to spend on. It’s your duty to avoid spending on unnecessary items.
Now that a new financial year has started, you have to think critically before spending on a product or service since the final consumer pays all the taxes attached. Taxes are good for the development of a nation but as an individual if you don’t plan well on how and what type of taxes to pay this can have a serious negative impact on your financial position.
For example, if Whatsapp and Facebook platforms do not help you generate income or create important networks, then decide to be online once in a while. Being responsible and having control of where your money should go is very important.
Ms Annet Katusiime is a financial literacy trainer and consultant at Be Money Wiser co. Ltd.