Hard times indeed! From high food prices, to high fuel prices, to rising commodity prices, the depreciating Uganda shilling. Well, Economic storms do not affect everyone equally. Some households struggle to survive, others adjust, and a few emerge even stronger. What makes the difference?
There is an interesting irony about the global economy: decisions made many kilometers away can determine what a family in Kampala pays for cooking oil, fuel, electricity and school fees. A conflict in the Middle East, rising international oil prices, currency fluctuations or disruptions in global supply chains may appear distant, but their consequences eventually arrive at our household dining tables. The global economy may be discussed in boardrooms and international conferences, but its real impact is felt in family budgets.
Economic turmoil creates winners and losers. When oil prices rise, oil-producing economies may benefit, while importing countries face higher costs. When currencies depreciate, exporters earning foreign exchange may gain, but households importing goods and services pay more. When interest rates rise, savers may earn better returns, while borrowers face higher financing costs. The same economic event can create an opportunity for one household and a financial headache for another.
Consider the Ugandan household. A family earning UGX5 million monthly may discover that its income buys considerably less than it did a year ago. School fees, groceries, transport, utilities and medical expenses continue competing for the same income. The salary may remain unchanged, but its purchasing power has quietly declined. This is the reality of inflation: money does not necessarily disappear; its ability to purchase things diminishes.
In The Psychology of Money, Morgan Housel makes a profound observation: “Doing well with money has little to do with how smart you are and a lot to do with how you behave.” This is particularly relevant during economic uncertainty. The household that wins is not necessarily the one earning the most, but often the one that manages its resources best.
Two Ugandan households earning the same income can have completely different financial experiences. One may have expensive vehicle loans, a large mortgage and lifestyle expectations that expand with every salary increment. The other may maintain an emergency fund, own productive assets, invest consistently and live within its means. When an economic storm arrives, the first household may struggle, while the second has room to manoeuvre.
Another winner is the household that diversifies its income. A salary alone can be a fragile financial foundation. A family that combines employment with farming, rental income, a small enterprise or carefully selected investments has additional protection. Think of a Ugandan professional who earns a salary but also owns agricultural land, operates a small business or invests in treasury securities. Such a household has more options when one source of income comes under pressure.
Robert Kiyosaki in Rich Dad Poor Dad popularised an important financial lesson: understand the difference between assets and liabilities. Beyond the book’s simplified investment philosophy, the underlying message is valuable. Households should not only focus on what they earn, but also on what they own, what they owe and what their resources generate.
There is equally a case for investing in knowledge and adaptability. Uganda’s opportunities in agribusiness, tourism, digital services, logistics and financial technology demonstrate that economic uncertainty can also create new markets. A teacher offering online tuition, an accountant providing digital bookkeeping or a farmer embracing irrigation and value addition is creating opportunities beyond traditional employment. In a changing economy, the ability to reinvent oneself is an important form of insurance.
Perhaps the most underestimated winner is the disciplined consumer. In Your Money or Your Life, Vicki Robin and Joe Dominguez challenge readers to examine the relationship between money, time and the life they want. The lesson is simple: not every increase in income should result in an increase in lifestyle. Planning household expenditure, reducing waste, avoiding unnecessary borrowing and saving consistently can protect purchasing power. Financial discipline is not about living miserably; it is about living intentionally.
Ugandan households can also draw strength from SACCOs, village savings groups, family networks and community enterprises. These structures demonstrate that financial resilience is not always built individually. Collective saving, mutual support and shared economic opportunities can help families withstand difficult seasons.
Ultimately, we cannot control international oil prices, geopolitical tensions or global financial markets. But we can control our borrowing, saving, spending, investments and skills development.
So, who wins when the global economy is in turmoil? The household that prepares before the crisis, diversifies before income is disrupted, saves before an emergency and invests before opportunities become obvious.
When the economy is calm, almost everyone can appear financially comfortable. It is when the winds change that the difference between earning money and managing wealth becomes visible. Remember…we were taught to save for that rainy day
In conclusion, we may not control the economic storm, but we can control how well we prepare our household for it. After all, the best financial insurance is not simply a bigger salary; it is a stronger financial foundation.
The writer is the General Manager Commercial Banking at Centenary Bank
Source: PML Daily
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