Syda N.M.Bbumba, The Minister for Finance, Planning and Economic Development on June 13 2009 delivered the budget speech to make sure the country is well directed for the financial year 2009-2010.
Some people were quick to support the plan while others expressed displeasure with the budget.
However, I, noted that the majority of Ugandans don’t carryout their personal budgeting and the majority of the few who do depend on their memory instead of writing it down.
Suzzan Kavuma, Lecturer of Development Economics at Makerere University says that very few people in Uganda formulate their personal budget on paper because of the culture, low income earning, lack of budgeting discipline and poverty.
The level of entertainment spending is so high such that one wonders’ whether Ugandans only plan for entertainment.
Makerere Business Institute (MBI) Examination Secretary, Hildah Rutasanga, says “Everyday in Kampala there is a concert for people to entertain themselves; it’s a clear indication that people don’t budget and save.”
She continues to say that she used to overspend and accumulate debt which made her end up frustrated.
“I used to buy new shoes, clothes which were not a priority and I could find myself spending all my income and incurring high debt burdens,” she said.
Just as every journey has its challenges, personal budgeting has its own challenges. A Lecturer at Makerere University in Faculty of Economics and Management, whose name was held at his request, said that budgeting has many challenges. For instance, on most cases expenditures are more than income, and in his case he must also scale down expenditures to meet his budget expectations.
He adds that he usually has monthly and annual budget which in most cases conflict.
“Annually I do it on long term expenditures such as buying land, while for monthly I plan for small and fixed expenditures such as house rent, food and electricity bills," he said.
However, he adds that it is better to ensure the monthly budget does not exceed the annual budget.
For people in informal sector and those with varying monthly income budgeting is complicated since one may expect to earn certain amount of income and end up earning less. However, Rutasanga advises such people to learn to live on their means by knowing who there are.
“Obviously estimate what you might earn in a month and budget within that range. Learn to adjust.” Rutasanga said.
Kavuma advises people in informal sector to have an average income by comparing the boom and slump period and use the average as the indicator for budgeting.
Another challenge is setting an emergency fund on your budget. People don’t set this on their budget and in most cases find themselves stuck and using money meant for other functions.
Sam Lumu a hostel owner says he has never budgeted since planning for an emergency is hard. He adds that expectations are not actually what ought to be.
“Like now my friend here has come and told me to buy him a kilo of meat and I must. How do I budget such expenses,” Lumu said. He is just another example of Ugandans who lose money through impulse buying and necessary cost for lack of the budgeting culture.
Mobile phone airtime is also taking a large chunk of income and is a hindrance to budgeting.
“ More than I want to budget someone might call me and tell me to call him back since he has a good business deal and find myself recharging out of my budget.’ said businessman Bob Kyagulanyi . He adds that the cell phone people can’t do without them.
To avoid some of these problems the following should be followed when carrying out a monthly personal budget: The first step is to write down the amount of income one has after taxation. As Rubasanga advises, never budget for the amount you don’t have.
Then sum up all your bills and receipt for the month which include; school fees, house rent, insurances, groceries, and other bills. Priority is vital; first begin with important expenses followed by non-essentials. Bills and receipts should then be subtracted from net income.
Set money aside for an emergency. This is because of unforeseen events are common budget busters. So always factor them in your monthly budget.
Never forget to make allowance for daily needs like food, airtime and other essentials. And always include regular payment for yourself. Though sometime you may find areas you are overspending, never starve yourself since it helps you stick to your budget.
Rubasanga warns, “Starving yourself is not good, since you can spend over a million on treatment of ulcers.”
Remember sometime you need to help and always budget for it since I believe the more you give the more you get.
Entertainment should not be eliminated from your budget. But always keep it at a minimum to make you focused and enjoy life.
Lastly, look where you can cut waste in your budget.
It is better to know there are challenges in implementation of your budget and some are overcome as shown below:
Remember without cash don’t buy anything. This will help you avoid impulse buying which may make you frustrated and end up feeling lost.
In order to get out of debt, you need to prioritize, create and maintain your household budgeting. For instance, the Makerere lecturer says that you may minimize expenditure on power bills by using energy savers, cooking with a gas cooker or charcoal.
Studying your spending habits and keeping a spending record is vital. The record can be on a journal or a budgeting program. The spending habits are critical part of financial planning since it help you minimize spending things like airtime and other luxuries.
Try to minimize expenditures of things like food by buying them in bulk, for instance, buy food at one time for a week and always look for cheapest places in town.
Read about budget, in books, journals, newspapers, and internet, attend seminars and workshops.
Personal discipline is very vital in success of budget keeping. Stick to your budget no matter what and remember managing your finances takes commitment so do everything you can. Note that change won’t happen overnight but be committed and reward will be worth it in long run.
“A journey with thousand miles begins today," Rubasanga said, "so do it now and tomorrow you won’t regret.”
-End…..
No comments:
Post a Comment