By Sylvia Juuko
Does awareness about money matters make you more financially secure? Not necessarily, if you don’t apply these concepts to your financial decisions.
While access to financial knowledge has improved in the recent past, it hasn’t been reflected by people’s money habits.
We have often heard that too much awareness makes people complacent. This is true for money matters. Some people consider issues like tracking money mundane, irritating and an unwanted distraction from their hectic lives.
After all, who doesn’t know that they need to keep a budget? They don’t realise that if you don’t apply what you know, you are no different from a person who is ignorant.
The key to tackling this attitude problem is admitting that the gap between financial knowledge and application is widening. You certainly don’t need to look far, your bank statement says it all.
Changing your attitude to reflect an open mind towards good money management is key to improving your financial well-being. For example, many people hate to admit that they cannot effectively plan for their money yet it’s one of the most common principles of personal finance management.
Remarkably, these household are manned by people who know it all but don’t even have a basic plan. It’s important to realise that if you cannot deal with what is considered most basic regarding managing your finances at the household level, it will be impossible to manage bigger amounts of money because your mindset cannot handle such a challenge.
If you are lucky to get a windfall, you will fritter it all. An open minded person will know that there is always something new to learn even about basic things such as budgeting.
When it comes to personal finance management, the hardest work is mindset change. Once you have conquered the mind, it will be easy to appreciate and be able to apply all the concepts about money. It’s only then that you will soon realize that there are no ‘turnkey’ solutions to your money challenges or creating wealth.
Another way to handle this issue is to appreciate the need for change in your money habits. Without this, all the knowledge, resources and mentorship will not work for you.
Instead, you only generate arguments and snide remarks towards any money management concept that comes your way.
For instance, if you are an impulse buyer who is always struggling with money because of lavish spending; it will be impossible to convince you that you need to budget for your expenses. You will instead claim that such concepts can’t work and don’t apply to your situation.
Related to that, if somebody told you to mind and plan your expenditure, you will instead interpret that message to mean that you are being cautioned against spending anything.
On the other hand, a shift in mindset would make you appreciate that if you had a robust plan for your resources, you would be in a position to know how to multiply what you have and generate more.
This would in turn give you more choices that would allow the luxury of spending to support your lifestyle without any money worries.
More importantly, you need to do away with the culture of instant gratification.
If you don’t, you will be compelled to do whatever it takes, including stealing, to spend more lavishly on things that do not generate any income.
This should instead be replaced by delayed gratification. However, it’s critical to note that changing or adjusting lifestyle may not be instant.
The period could be challenging but it is doable. You need to develop an unwavering trait to stay the course of prudent financial management.
Despite the hard work, the pay-off should be worth the effort, especially when an increase in net grows allows you to spend and enjoy your lifestyle without struggling to make ends meet.
The writer works with Bank of Uganda