By Sylvia Juuko
In our lifetime, there are expenses that are predictable and others that catch us by surprise. For instance, parents know that they have to pay school fees for their children. It is an expense they have to plan for.
However, they may not be prepared for an emergency operation for their own parents when their health begins to fail with old age.
To try and manage these life events, it’s crucial to handle our finances in such a way that we can confidently deal with the predictable aspects as well as manage the shocks to income that may arise from unforeseen events.
These cycles are mostly determined by age, marital status, as well as level of income among other things.
There are a number of ways we can ensure that we make financial choices that will enable us smoothly manage the several events in our lifetime.
You need to be cognizant of the fact that your needs will undergo change depending on your age. For example, the needs of high school students or those that have just landed jobs will differ from those who have retired.
If you are still in your twenties, you could be capable of undertaking investment risks because you have the advantage of time on your side.
On the other hand, a seventy five-year-old may not have advantage of age, and may opt for a more conservative investment approach given that they may never recover from a loss arising from a bad investment decision.
Ideally, when you are still youthful, you should work towards accumulating assets and growing your savings as well as investment portfolio.
Those in this age bracket with access to information, resources and mentors have no excuse to poorly manage their personal finances.
There are many who are playing catch up, given the fact that they were not exposed to financial education at an early stage.
Nevertheless, it’s not too late to turn around your fortunes by devoting time and energy to prudent financial management practices.
For most of these events that include; accumulating assets, studying, marriage, starting a family and acquiring homes will necessitate accumulating amounts of money that are higher than what you may ordinarily have at hand.
You need to accumulate savings that should eventually be invested so as to support these changes in the lifecycle.
For example, you could lose your income, suffer a collapse in business or have a medical emergency. While you cannot predict when this can happen, you need to have resources that can cushion you during such low times.
The writer works with Bank of Uganda