For those who do not live in Uganda or have been asleep for the last two weeks there have been a number of public demonstrations (well mostly riots) in parts of Kampala and some other towns over the rising food and fuel prices. Many people have asked the Government to step in and either put in place price controls or lower the taxes to reduce the prices, but the Government has declined to do so, insisting that Uganda is a free-market economy. Unfortunately, the riots resulted in many people losing productive workdays, several business owners complained about looters taking advantage of the chaos to rob or vandalize their property.
This article is not intended to address the riots or their causes or merits or drawbacks (too many people have given their opinions) but to provide my two cents worth of how we can make our own personal financial adjustments and survive the price hikes that are not just in Uganda, but all over the world. I'm sure you've all heard these tips before-I'm trying them and I hope they'll work for me and I'd appreciate any other suggestions that you might have:
Face it-prices will always go up: We need to accept this fact, especially with regard to essential goods like food and fuel. It was not very long ago that a litre of fuel cost UGX 900/= and with OPEC planning to cut supply again, we can expect the fuel price to rise further in the near future. While I'm not too pleased with the cost of living (I'll probably never be happy until everything is free), I'm not surprised by the price hikes. I think price controls may have a short term benefit, but ultimately curtail the free-market forces of demand and supply, choke enterprise and lead to high prices in the long run. Also, while we complain about the cost of food, farmers (who have often gotten a raw deal from the market), are happy when there are high prices.
I think it is more prudent to prepare for price hikes and find ways to live within our means than to expect someone else to cut prices.
Budget and set financial targets: It is said that you cannot hit a target if you don't have a target to hit. Budgeting is the first step towards financial freedom and it gives you the power to plan for and allocate your limited resources. A budget acts as a financial guide and enables you to control your finances instead of having your finances control you. It also helps you to meet your saving goals and plan for unexpected financial emergencies
Keep a record of your expenditure: Tracking your expenditure is universally recommended by financial advisers, but unfortunately often rejected by people who find it tedious and don't really worry about monitoring their expenditure. Keeping a record of expenses helps you identify your spending habits and weaknesses. Not recording expenditure keeps you blissfully unaware and safe from the perceived tedium, but exposes you to the risk of eventually asking "where did my money go?"
Earn More: I don't mean to emphasize the obvious, but using our free time to engage in business and using our time, gifts and talents can actually lead to more income (some ideas don't even need capital). We should use internet to look for or create business opportunities (there are many success stories of such companies), find items to sell to workmates and friends, if you can sing, join a band (they usually play after working hours anyway) or create and sell art pieces if you have the talent.
Keep more: It is generally accepted that prosperity does not come from earning more, but from spending less and living within our means. Carry a packed lunch to work, reduce the number of times you eat out and don't buy too many rounds of drinks for your friends when you go out. Avoid retail therapy and the designer label craze, cut your shopping list to remove unnecessary/luxury items, compare prices from shop to shop, eat less (God knows many of us need to go on a diet anyway). Cut back on the contributions to graduation parties or weddings-or if you are throwing a party or organizing a wedding, don't spend too much money. Mow the lawn and wash your car yourself-you could save alot of money and work out in the process. Give up your expensive gym membership and take up a sport that is free or less expensive.
Don't give away what you can sell: Ensure that you can get value for your time and skill. Unless you are doing charity (which has a value), ensure that you do not volunteer your time unless you can see a financial or career benefit to doing so. If someone asks you to give them time or do them a service and you don't intend to do it for free, ensure that you tell him or her in advance that you expect payment.
Invest wisely: When you save money, find a sustainable investment that will guarantee you income on a long-term basis. This could be on your own or with like-minded friends. You could invest in securities, real estate or other merchandise. Ensure that you do not give your hard earned money to a shady people who promises you quick returns as they could steal your hard earned money.
Study and take calculated risks: Learn about investment and what money making options there are out there. Learn how to read financial statements and prospectus and ensure that you can understand the material information and assess the risk and viability of any potential or actual investment. Discuss your investments with friends who are accountants, lawyers and entrepreneurs and don't be afraid or too proud to ask questions or take advice. This will enable you to take calculated risks, and make informed investment decisions.
Overall, I'm learning to take my money, time and skill seriously and treat them like the assets that they are. It is only when we learn to respect our resources that we can get the full value from them.
No comments:
Post a Comment