Personal Finance: Getting your financial plan right is key

By Eronie Kamukama

It is that time of the year when scores of students have just completed their final year at university and are scrambling for every job opportunity that comes their way.

On the other hand, graduates are increasingly finding jobs and pensioners are yet to receive their arrears worth sh50 billion. All these groups of people are looking for a source of livelihood for the years to come but the dilemma most people go through once the paycheck comes through is what next to do with the money.

This is why you should plan for a sound financial future.


What is Financial planning?

According to Richard Ntulume, a financial consultant at KSK Associates in Kampala, it is about preparing how to use your money to meet your unlimited wants.

Financial planning starts when one starts earning income.

Ntulume says, “It starts when you start earning because you cannot plan on what you do not have. So you have to have a job, a source of income say may be transferred income or retirement fund.”


Doing it right

Everyone should have short, mid-term and long term goals. Ntulume says basing on your salary, you are able to project how much you will earn by the end of the year.

For one who has just found a job, you can plan to achieve your mid-term goals and this is slightly in a year’s time.

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Central to meeting these goals is knowing how much money you have, then prioritize the immediate needs and disregard what you think you can do without.

Make sure that you save for your high value needs and when immediate need for them arises, Ntulume advises finding external financing.

However, he cautions people on living or planning beyond their means.
“You have to be sincere with your earnings and once you know this, align your income to your needs,” he notes.


Achieving goals

To achieve goals in the long term, one can project earnings and save about 5% of the income to accumulate capital for instance to open up a small business. Ideally, every income earner should at least have savings, investments and expenses.

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Financial planning is crucial because one needs to be self-sustaining and so living by the day should not be an option.

“You have to have control over your financial future so that even in the eventuality that you lose your job, you remain financially independent.”

For anyone living a purposeful life, there has to be a plan in place because everything revolves around finances, be it health, social or academic life.

Ntulume adds, “If you are to grow financially, you have to plan and appraise yourself basing on the extent to which you have achieved some of your goals.”


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