Business
No quick fixes for a bad financial situation
Publish Date: Mar 07, 2014
No quick fixes for a bad financial situation
Gambling with the hope of winning a jackpot will not help you out a financial hole. You will only lose more money
  • mail
  • img
newvision

By Sylvia Juuko

Kent, an auditor in a prominent hotel in Kampala, is dealing with what he considers the most challenging financial circumstances of his life. A number of poor financial decisions have seen his debts spiraling.

He is currently servicing two loans  alongside a long list of creditors including family and friends. To make matters worse, two loan sharks are baying for his blood.

Servicing his financial obligations takes up about 80% of his monthly income. Unfortunately, he used some of the loans for bad investments which he had to abandon.

Amid this financial pressure, he is juggling two jobs, supporting a string of dependants and can barely take care of the basic household needs.

Fortunately, he secured two plots of land and property in the countryside. Kent’s state of affairs may ring true for some of us. And for most people in such situations, a quick solution for getting out of such quagmire is appealing.

However, anyone who has dug themselves into such a situation or an even more adverse state than this anecdote cannot get back on the right financial footing overnight.

Such financial situations are caused by poor planning and weak money management habits especially extravagant expenditure and improper use of borrowed money. But this does not mean that one cannot start over.

If you acknowledge responsibility for the bad financial decisions, this action plan could guide your financial makeover.

Identify a course of action

Any decision made should be against a background of your current life situation, relevant information, skills, earning opportunities and goals. Kent’s most urgent needs include paying his debts and meeting his living expenses. If there is a possibility of renegotiating his loan repayment, it can ease the pressure.

That aside, he needs to utilise the  pieces of land by identifying crops that will bring quick returns to supplement his income. He can also consider growing food for household consumption. As a matter of urgency, he needs to expand his earning capacity and put in extra hours to get extra income to pay off debts.

Make harsh decisions

Challenging times usually require painful decisions. While it’s advisable to seek counsel from a number of trusted people, you have to make the final decision and take responsibility. Examine your expenditure and determine items to eliminate or reduce, as long as they are not life threatening. This action will allow you to control your short term difficulties.

Assess money beliefs

Examine your values related to finances. Do you consider feelings related to money on the basis of factual knowledge or influence by others? This is likely to influence whether you spend now or later in order to save. Assess whether your financial decisions are influenced by social pressure, need for luxury items or basic household needs.

As such, it’s important to remember that the various stages in your life cycle influence your financial choices and actions.

If you do not deliberately pay attention to the nature of financial decisions you make, their short and long term impact and the risks therein amid the prevailing economic conditions, you are likely to endure financial pressure for long.

The writer works with Bank of Uganda

Personalfinance222 @gmail.com

 

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Egypt to offer projects to domestic, foreign investors
Egypt will offer a slew of projects to domestic and foreign investors at a conference in March aimed at kick-starting an economy battered by years of political unrest....
Students’ involvement in investment negotiations is key
University students have been urged to get involved in negotiations of trade, bilateral and investment agreements rather than leaving it to technocrats and politicians....
Practices to add to your daily business schedule
At the end of each day’s work, find time to identify three things that went well. Once you identify them, ask the critical question such as, “Why did ‘X’ go well?”...
Dubai insurer set for Uganda
The new firm will enter into strategic partnerships to oversee, design, and control processes of selected licensed brokers....
Textile manufacturers want the national textile policy implemented
Textile industries are pushing for the implementation of a National Textile Policy. They also want government institutions compelled to buy textiles from local companies....
BOU has no influence on govt spending
There have been allegations in the media that Bank of Uganda printed money for the 2011 elections, which led to the high inflation rate at the time....
Should workers be subjected to a 4% Health Insurance Tax??
Yes
No
Can't Say
follow us
subscribe to our news letter