Dropping last year''s bad money habits

By Sylvia Juuko

The year 2015 provides us with a clean slate as well as an opportune time to drop all habits that set us back financially.

You can start with identifying activities (excluding taking care of necessities), that take money from your pocket, but fetch no return.

Remember your current state of finances is a result of the way you think, behave or do things whenever you deal with money. Any decision that you have made in the past that doesn’t improve your financial standing should be re-examined or dropped.

Any money habits that are steeped in culture may not be broken overnight. However there’s always a start.

From experience, introducing change requires a strong will to resist any peer pressure that translates into poor money decisions. This level of discipline can be achieved if you consider the following approach:

Make gradual changes

The trick to adopting new ways of doing things is to avoid drastic changes that cannot be sustained over a period of time. For example, if you are a lavish spender on trinkets, any advice to drop this habit suddenly may not work for you.

Alternatively, you have to examine the underlying reasons behind this spendthrift behaviour and ascertain if this shopping is therapy for a much deeper problem that needs to be tackled. Once you get to the bottom of the issue, advice on checking your lavish spending makes sense.

Have in mind a goal

It is always important to focus on the end result if you want to do things differently this year. For example, if you want to own an asset at the end of the year or after three years, visualise the benefits of the income to be derived. Then look at those aspects in your life where you spend money that can’t be accounted for.

That is the money that can be diverted to acquiring the asset you desire within a set time frame. Remember to have a realistic goals which cannot be achieved overnight. Being patient, but persistent in implementing your goals are hallmarks of good money management.

Do not play victim

Have you mastered the game of apportioning blame to someone else or something for your current financial circumstances? It is either the economy, your employer or your customers who are frustrating your efforts to get ahead. You cannot do this every year and expect different results.

Learning to take responsibility for your actions or inactions is one way of breaking this cycle of blaming others. For instance, what have you done about your situation other than making excuses?

If your pay is low, what have you done about it? If customers are not purchasing stock what is your game plan? As long as you have a head above your shoulders use it and quit blaming others.

Put your knowledge to use

All that you know about principles of managing money cannot count if it does not trigger changes in the way you think and eventually into action. So you know about the importance of saving, but do you own a savings account? If you are saving, is it enough to meet your investment goals?

Are there better ways of approaching this saving initiative? Who has done it better and why? If your savings are for future expenses, how do you move to making your money generate more money? Proactively looking for answers is the only way you can learn new ways of doing things.

As you go about this, you need to appreciate that you do not know it all. If you have any qualms, check your personal financial statement. Your financial position tells a lot about your level of financial literacy. With an open mind, you are more amenable to learn new skills or unlearn the bad habits.

To achieve this, you have to make it a mission to read, research, network and share experiences with people who have a money head-start. The advantage with money issues is that there are plenty of people who have trodden this path that you can learn from. That way, you can avoid making costly mistakes.

Attitude is key

If you are to succeed in this money game, do not underlook ideas about personal financial management. Your status does not necessarily make you an expert of issues related to finances.

You may be in management position, but can learn some insights about money management from that money-savvy guy who cleans your office.

Therefore, it is important to drop the attitude and be open-minded about what you can learn about money. This is a life-long skill where you take lessons everyday.

The writer works with Bank of Uganda
Personalfinance222@gmail.com


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