Too little money? Deal with the problem

By Sylvia Juuko

When money is scarce, it’s much easier to convince ourselves that we are still in charge of the situation than accept that it is time to make some changes.

Our attitude, action or inaction can betray the extent to which we are sinking deeper in financial ruin, yet we stubbornly hold onto the belief that we are doing okay.

It doesn’t help to stay in denial. To turn around your financial mess, you need to make a decision to confront your ‘demons’ if any change in behavior is to be achieved.

Decide to point the spotlight in your direction and look at your money mistakes and the positive decisions about finances. Once you have done this, it’s possible to make some changes.

In this regard, there are several telltale signs that are a pointer to poor management of our personal finances.

The most common one is the famous having ‘too much month at the end of the money.’ This essentially is running out of cash to finance the running of your household budget during the first week of the new month.

This can be caused by either low income or poor money management. If low income applies to your situation, then you have to expand your earning capacity. The most important skill in this instance is to effectively manage you current income. Unless you prioritise and get a handle of what you currently earn, you will not have the capacity to handle additional income that you are aspiring for.

Another telltale sign that you need to change your money ways is the belief that borrowing is the silver bullet to your financing needs.

It’s very common to hear complaints related to the high cost of debt. But if you asked this person how much they have saved, they will wonder what’s wrong with you.

If you borrow money to meet the most routine expenses to run your household, especially entertainment, then your finances need a total makeover. Unless you know how to make debt work for you, you will always complain that it’s expensive.

With this kind of attitude, the debt that you keep complaining about will be secured to finance consumption. You will equally think that to start something on the side, you need to borrow capital. What you haven’t put in consideration is how you will finance the associated costs including repayments as your business picks up.

If 80% of your monthly income is servicing debt obligations, particularly consumer debt, this is a sign of poor money management. In such instances, dodging your creditors and avoiding some routes with the fear of being waylaid by money lenders or telling lies to postpone payment of soft loans you have acquired from your colleagues at work or relatives characterises your life.

Once you fall into this trap of ‘serial borrowing’ for non-productive ventures and the associated stress, you need to stop and make a decision to make changes to this kind of lifestyle.

Anyone who claims the inability to settle until their account balance is zero falls has poor money habits. It’s not hard to spot such people.

As soon as their income is delivered to their bank account, they become restless throughout that week, claiming they have so many errands to take care of. Once the ‘bounty’ has been cleared, you will notice a change in their demeanor, with the most likely topic related to cursing their employer.

This should be a telltale sign that you are not on top of your finances.

Other signs to look out for include not planning beyond today, the lack of savings, thinking that a deal will sort you out for life among other things.

The good thing about managing finances is that you can always make a fresh start. While some decisions about money may be costly, the only person to take responsibility for your action and turning your financial life around is you.

The writer works with Bank of Uganda