Making your finance plan work

By Sylvia Juuko

Planning for your finances should be easy, but many people struggle to keep up.

Some get by without planning and therefore dismiss it as an obvious thing that does not merit discussion or particular attention.

But have you considered the fact that your state of personal finances could be attributed to planning or the lack of it?

To manage your finances prudently, you need to have a plan that will be executed through anticipating current and future needs or setting financial goals, working out the resources required and apportioning responsibility within your household where applicable.

A plan helps you achieve clarity regarding financial goals with numerical targets and a period for their execution. Some people choose to put their plans on paper, which is advisable, because it accords you a record of your aspirations against which to make an assessment of progress.

These aspirations can be summarised through a budget that assists you in allocating money to expenditures, savings and investments.

Making these choices will be easier if you have an accurate account of where your money goes, as well as a vision of where you want to be when you eventually retire. Also important to note, are the lifestyle changes needed and financial knowledge required to achieve short to long-term financial goals.

To be able to progress in your financial journey, you need a considerable amount of discipline to implement your plan.

But how do you stick to your plan amid the shiny purchases that are beckoning? You can do this by understanding the importance of not getting your “wants” today to be able to create a larger asset base that can support most of the things you want in life.

Some people tame impulse spending by going to these places without any money and having “cooling off” periods overnight to establish if they really need that shiny purchase. Please note that spending is not a bad thing, if it is within your plan.

You also have to ensure you have the resources to support the purchases without derailing your financial plan. Anyone who thinks planning does not work should look at the kind of information and opportunities that are available today that they missed last year.
 

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Be deliberate with the items you plan to spend on

You have to commit to learning new ways of doing things and not just reading about them. For example, if your plan is to buy real estate, do something different this year to achieve that goal.

Be proactive and get brokers to visit the different sites to get a sense of what’s available, tenure and the cost.

Find out the payment options. Armed with this information, decide whether you need to save a higher or lower percentage to acquire the land/house.

You can also consider spending less on entertainment or how to utilise your skills to earn extra income. This can be applied to whatever goal you opt for and how the options fit in the current financial context.

Be deliberate with the items that you plan to spend on this year and categorise them into the frequent and less frequent type of expenses. If you are in a situation where your expenses outmatch your current income, you either have to delay those expenses that are not particularly life-threatening or pro-actively seek other sources of income.

Having a spending plan will create limits that you should not breach, as well as identification of the sequence of implementation. You can consider putting aside money for the regular expenses, for example, tuition or rent.

Start by saving specific amounts towards these irregular, but critical expenses. If you did this last year, you would not be bogged down by financial pressures during this back-to-school season.

One way to make your financial plan work for you is to look at it as a journey that will have bumps, sharp bends and smooth sailings. For example, when you overshoot expenses for certain allocations while implementing your financial plan, it can be offset by cutting back on certain items next month.

Otherwise if you view this as a failure, you may be forced to dump the entire plan. It is also possible to make certain assumptions or estimates that fall through, meaning you require flexibility and adjustments in your plan.

To make your ideas turn to reality, undertake some activity today that will ultimately lead to implementing your financial plan.


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