You might be masked in the comfort of having a ‘nice’ job yet you are living from pay cheque to pay cheque.
Have you considered stashing away some money so that you can survive three months without an income? The trick lies in reducing expenses and investing part of that salary while you still can. Some financial advisors concur that your income level does not inevitably define whether you are rich or poor; it is your money habits that make the difference.
Below are some of the money habits that will keep you poor.
Mr Newton Buteraba, founder, House of Wealth says looking at money as a communist rather than a capitalist.
“Communist is where every money you get belongs to the rest apart from you. You think of government tax, you pay rent, you buy food, you pay for transport and help relatives among other things. This means when you get the money, you try to pay for everything rather than setting aside some money which you can save and invest,” Buteraba explains.
Secondly, failure to budget. When you do not budget, you spend money unnecessarily.
“Money will start moving on its own. However, when you budget you’re giving money the direction on where to go,” he says.
Failure to save with a goal and that goal should be rolling the money you save you save to invest to save to grow.
Failure to budget
Buteraba notes that failure to budget makes it easy to spend on impulse. Unplanned and spontaneous procurements result in buying non –essential items that can drain your finances.
He notes that it is important to ask yourself if what you want to buy aligns within your budget or goals before paying the money.
Failure to invest in financial books
These offer free knowledge that is vital for financial growth. But it requires you to spare some time to read books on managing finances, inquiring from friends, having financial advisors who can advise on how money works.
“When you’re ignorant about how money works, it means you’re already struggling,” Buteraba says.
Living beyond your means
When you live beyond your means, you are likely to fall into the life cycle of poverty. This makes you prone to financial instability since you are spending more than you earn.
Whether you earn a decent salary or not, it is crucial to live within or less than your income to ensure that you do not spend all that you get but rather Save part of it.
Under such circumstances, it is relevant to minimise spending on non-essential items or struggle to keep up with your peers or buying now and paying later to ensure you live on pay check to check. This protects you from being broke and asking people to lend you money all the time.
Paying less attention to saving
Ms Naome Kiwooma, counsellor notes that it is easier to save before you spend. Setting aside a portion of whatever amount of money you get helps you avoid spending the whole of it without notice.
This, she says, is because your present need will outweigh thinking about saving a portion of your income. In addition, since our shilling does not have that much value, you might end up spending the whole amount even without the intention.
Spending patterns
Failure to review financial statements whether on the credit or debit side on a monthly basis to align you with your overall budget and spending patterns might mislead you resulting in errors, debts and lack of awareness on how or where your money goes,’’ Ms Barbara Katende, personal finance coach says.
Source: The Daily Monitor
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