The New Year and the euphoria that surrounds that period provides the perfect timing for putting all aspects of your life in order because the passing of time is so evident.
It is the time most people adopt new money habits or improve the handling of their finances.
Anyone dillydallying over improving their financial status should remember that whatever you do with your finances today will have an impact on your future.
Since the time for resolutions is here, make one to get financial independence. To get started, have an idea of where you want to be financially. Then activate this idea by putting together a plan, with clear timelines and the amounts that you want to accumulate as well as what you need to do to get there.
For the uninitiated, this may seem tedious or boring, but it has to be done. However, once you have your plan in place, start by reviewing your income and expenditure to track where all your money goes.
The most practical way to record your expenditure is to use a phone or computer application that allows you to list these items. A small notebook to record all your daily expenses should suffice though.
At the end of the month, these items should be input into a spread sheet that contains your budget.
If there is a deficit at the time of review, it's clear you need to rein in your expenditure. However, if you are in a situation where all your income is taken up by the essentials, boosting your earnings becomes inevitable.
There are periods when increases in expenditure are inevitable. For example if you experience a medical emergency or when prices of foodstuff shoot up, your expenses will inevitably go up. More so, months like December are characterised by high expenses. You need to have these exceptions in mind when planning.
Financial independence is important because it offers you choices. For example if you saved money for December expenses, you can choose to either invest that money, take a trip to dream destination without concerns about future expenses when that time comes.
The other goal in the New Year should be to get realistic and lead a lifestyle that matches your financial status. Once you do this, it will be possible to save some income that can be eventually invested. Your options could include a specialised bank account, through investment groups or any other asset classes of your choice.
Remember that there are several initiatives you can undertake at the beginning of the year to improve the way you manage finances. Remain true to yourself and ensure that decisions are underpinned by your financial status.
Once you are able to balance your earnings, savings, expenses, borrowing and investment, to a point where the income accumulated from your assets can finance your lifestyle without you having to apply labour, then financial security is within reach.
More importantly, there is no quick fix to managing finances. It is a deliberate effort of learning, relearning, discipline and hard work to grow your net worth to achieve assets that outstrip your liabilities.
The writer works with Bank of Uganda