Lockdown changes spending habits

The coronavirus pandemic is pushing several people to adjust their expenditure in order to survive.

As the second phase of the lockdown wears on, there is no doubt that it has accelerated the need for frugal behaviour and better financial management skills. Peoples’ dynamics of spending, saving and investing have shifted.

Much as other countries had suffered the pandemic’s effects and gone through multiple lockdowns, in Uganda life was getting back to normal until the situtaion got out of hand in June, pushing us into another lockdown.

Ms Evelyn Mwagalwa is a single mother of two. Last year, she lost her job during the lockdown when the company she was working for restructured. She then invested her savings in an online business to sustain herself and children.Her business had started picking up, her clientele had grown, but this came to a standstill when Uganda locked down business for the second time.

This was as a result of the second coronavirus wave, which hit the country by storm.

Sharing her experience Mwagalwa says: “I have needs right now but I can’t meet them because times are bad.  For example, I want to buy a washing machine, water heater and also become independent with my electricity (get my own pole and Yaka meter).” She can’t do all these now but can hold onto that money for later times.

“Because of her past experience, Mwagalwa thinks that postponing certain things until the tide settles is what she has applied,” she shares. Just like Mwagalwa did, Prosper magazine takes you through possible ways of postponing certain expenditures until when the storm is over.

Mwagalwa says that she was one person who would make sure home is stocked with different types of food and sauce as well as fruits and vegetables. In some cases, the fresh food would go bad!

“I now don’t buy in bulk that much. I realised I save some money doing that too,” she shares.

Mwagalwa who was a giver keeps his money close. “You abruptly come to me with an issue below Shs100,000, I would help you sort it. I would also contribute random condolences (Mabugo), birthday, wedding and Kwanjula or shopping for a sick/ loved one. Not anymore,” she shares.

Instead, she has joined a savings club where she deposits a fixed amount every end of month.

In addition, she saves some money at home for emergencies. When it accumulates to Shs100,000, she deposits that with the savings group too.

Expert note

Mr Elijah Omagor, a business coach, says it is important to postpone certain expenditures until later for the following reasons.

During such times of uncertainty, like the current lockdown, both businesses and individuals should preserve their cash. “One of the time tested means of preserving cash is to postpone any nonessential expenditure and only incur necessary expenditure,” he adds.

Omagor says that as a result of the lockdown, there are many goods and services that people can forego because they cannot be consumed.

“It would not make sense to buy fuel for your car if you are locked down at home. Instead, the money that would have been used to buy fuel should be saved and put to either buy fuel when the country is opened up, or better still be invested,” he suggests.  Fueling your vehicle whilw at home is an expenditure you can postpone.

The best way to do, is by putting the money away in a short term investment such as a three months Treasury bill, fixed deposit or Unit Trust Account. He advises: “Investing this money, will earn you some interest as you wait for the situation to normalise.”