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Uganda: Grow Rich - Make More Money, Save
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New Vision (Kampala)
COLUMN
10 May 2008
Posted to the web 12 May 2008
Kampala
When you make more money, take it to the bank and save it. That way, you will be able to invest it and acquire more wealth
WHAT do you think is more important: saving money or making money? They're both important; equal factors in the wealth equation: Wealth = what you earn - what you spend. What is most important depends on one's current financial situation. If you have a good income, then the most important thing you can do is to control spending.
If your family earns sh12m a year and is unable to make ends meet, or is subsidising an affluent lifestyle with credit, then it's more important to scrutinise your spending habits than it is to make more money.
Try the following:
Track every shilling that you earn and spend. It will make you more aware of your money habits. The key is to track everything, even the sh500 you spend on katogo every morning. You want to develop money sense, an awareness of where all your money is going.
Reduce expenses. Find areas where you're spending out of habit, and reduce these costs. For example, in 2006 I spent sh300,000 a month on booze. Even I could see that this was foolish. I made a goal to cut my booze spending by half in 2007. By going to the pub less often, I met this goal.
My goal for this year has been to cut my booze spending by half again, to sh75,000 per month. Because I've decreased spending on booze, I have money available for more important things, such as retirement savings.
n Consider a budget. Budgets are not for everyone. (I do not keep a budget.) But for some people, they're magical. They impose an order that helps to clarify their financial goals.
If, on the other hand, you don't make much money, then the best thing you can do is to increase your earning power. If you have already reduced spending to the bone, then you must increase your income.
Minimum wage sucks, no question, but you don't have to settle for a lifetime of low pay. The younger you are, the more chances you have to improve your situation.
Get a second job. What's worse than working one job? Working two jobs. But sometimes that's the best option. Many of us have worked multiple jobs in order to earn enough to get by, or to save to improve our situation. You too can. But recognise that this is a short-term solution. Your goal should be to shirk the shackles of debt, or to escape minimum wage, so that two jobs are not necessary.
Get a promotion. One way to break free is to move up in your current company. Hard work and a positive attitude pay dividends. There is never an instance in which hard work and a good attitude have gone unrewarded, either through increased pay or a better position. So, persevere.
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Get an education. Do not underestimate the value of education. This is the most important step you can take to increase your earning power. If you're still in school, make the most of it. If you're older, take classes in a field that interests you. After nine months of computer classes on evenings and weekends, I was able to get a programming job that paid sh700,000 per month.
If, like most people, your family is middle-class, then it's important to work on both earning and spending. Live a frugal lifestyle, but also take steps to improve your earning power.
If you can cut spending while increasing income, you'll be startled by the change in your financial situation. Remember: frugal tendencies help everyone - both those with high incomes and those with low incomes.
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