MONTHLY BUDGET

Lesson #2: MONTHLY BUDGET

 

 Impulse buying is where one buys out of instinct, peer pressure, social influence or without planning. To avoid this make a monthly budget, dividing basic needs(rent, food,*clothes),Utilities (Water, Electricity, airtime).Once this is settled divide the rest among daily expenditure (transport, lunch) avoid unnecessary expenditure like too much boda boda (walk a distance, it’s good exercise) eat in cheaper places or better still pack food. This budget should be followed strictly, yes it’s easier said than done but a strict discipline injected in will maintain this habit.

Below is a small budget for a small income earner (employee).

SALARY: Ugx.500, 000

Rent:	100,000 (If at all your renting)
Food:	150,000 (This applies effectively if you’re single or when you’re contributing. This includes all meals, know how much you spend per meal)
Clothes:	50,000 (*these can be bought once in 4 months)
Utilities:	50,000(electricity & water)
Airtime:	20,000 (load only the business line that generates money)
Transport:	60,000 (assuming you use 2,000 per day to and fro, you can also reduce transport costs by walking a distance to save more money)
Tithe:	10% of your income (Yes this sounds insane but in later lessons you shall see its importance)
Save:	20,000(this money should not be touched, it’s for emergency i.e medical or future investment)

 

Stick this budget on your fridge as a reminder or on your mirror or any place where you can easily remember it. Make it before your paycheck comes in so that you know how much to spend and how much to save.Avoid Impulse buying.

FINANCIAL LESSONS FOR FINANCIAL FREEDOM

FINANCIAL LESSONS FOR FINANCIAL FREEDOM

CHAPTER 1

FINANCES

Lesson #1: FINANCIAL DISCIPLINE

Financial discipline in this case is the ability to have control of you cash out flow. This is a discipline practiced by wealthy people worldwide. If you want to control your finances you must have the discipline of not spending money on impulse, trying to please people or trying to “fit in with the crowd”.

Learn financial discipline in order to avoid being broke in the middle of the month and accumulating debts. Stick to your social class to avoid such strain.

How do you learn financial discipline?

·         You should know how much you earn and how much you spend. If you spend more than what you earn, start cutting down on your expenses.

·         Have a monthly budget to get hold of your expenses (for starters have a daily budget to know how much you spend in a day, at the end of the week compile the amount spent to determine how much you spend per week, then at the end of the month compile all the weeks to know how much you spend per month)

·         Your monthly budget should include ONLY the necessities i.e. Rent (if your renting), Food,*clothing (in this case clothes, shoes, e.t.c can be bought once in 2 months on a budget of their own), Utilities, School fees (if you pay in installments) tithe (if you’re a Christian), fuel (if you drive), emergency and savings.

·         Identify your necessities and differentiate them from your luxuries e.g. Nokia double- double Vs. Samsung galaxy tab.

·         Never get into the habit of borrowing money or asking for salary advances, it’s the surest way of being broke all the time.

·         Avoid lending out money all the time, you can never guarantee the honesty of your debtors (Proverbs 10:4)

·         Learn to accept your social class, if your friends earn more than you, suggest alternative hang out joints preferably those that do not strain your pockets. If that is not possible avoid hanging out in such places all the time or best still avoid them completely.
·         Keep friends who practice financial discipline.