Managing finances can be as hard as making the money if one does not adapt basic financial principles. Careful cash management is critical to meet day-to-day needs, cope with unexpected emergencies and take advantage of opportunities. It is no secret that money issues are the leading causes of stress, relationship strain, unhealthy coping behaviours and divorce which reduce our productivity. All these symptoms of financial illiteracy can affect our emotional state and impact those we care about most. Financial literacy is valuable at any age.
We have heard some people say, “My money is mine alone. The children will work for their own.” As an individual, it is advisable to make a spending plan and make it a habit to stay within your plan to manage your finances well.
In one of the Sacco’s I trained, I asked members to write down two reasons why they were saving. A few had their plans well set. They knew how much they needed to save and how much credit they will borrow in order to achieve their goals.
However, five people saved simply because a Sacco started in their neighbourhood and felt to be part of the community as they think of what they will do with the money when it accumulates. Saving without a goal is being unrealistic with your money. Money needs to be directed on what to do and this can be done if savings are linked to a goal and plan on how much, for how long and when you will need the money to affect your goal.
A positive attitude toward financial management can have a positive effect on an individual’s intentions to utilise several types of savings/investment vehicles, limit borrowing and manage their finances in more beneficial ways. Mandatory savings such as National Social
Security Fund have bailed out many people after their active years in service since many people procrastinate to plan for old age. To avoid the pressures and anxieties that come with old age, it is advisable to develop a retirement plan suitable for your future needs.
Many people have a complex relationship with money. I have seen families torn apart by it, neighbours fight over it and friendship lost by it. However it is never too late to change from the current behaviour to a desired behaviour in the way you manage your finances.
Ms Annet Katusiime is a financial literacy trainer and consultant at Be Money Wiser co. Ltd