These past six months, I have gone down a rabbit hole of financial development. I have always said that I am just not good at finances and I think it was a self-fulfilling prophecy coz I was indeed not good at it but I decided to have a conversation with me, myself and I and turn this mess I was in in a different trajectory.
I must say it’s not been easy….not that it is hard. It’s just that it is really a mindset shift. Financial discipline and growth are all in the mind. It’s weird but it is, well like all things in life so it was me seeing past the circumstances to where I wanted to go. It was the simplest of things like budgeting. I know I know…you are all going to say you budget but have you really budgeted?
I went online to find out more and boy o boy, there were so many types of budgeting- percentage budget, zero-based budget, calendar budget, paycheck budget, cash envelope system. Man, I was like I will never get anywhere. It has taken almost six months of reading and watching to get where I am, to understand that it doesn’t matter how much I earn, what matters is what do I do with what I earn? That was pivotal for me.
I always thought I needed to earn a lot to save and invest but nop, the smallest amounts make a difference. I know you are probably saying but I need that small amount- I get you but if you check through your expenses you can put away even just 5000ugx or $1 or 1 pound. And that is what I started doing. Putting aside any small amount as I could, I built it to quite a sizeable amount and then I ate it all. Sigh!!! So then I realised I can not have the money with me at home coz well KFC may call. I admit it. I like junk food. Trying to eat healthy but eeeehhhhh….
“Financial freedom is mental, emotional, and education process.”
Robert Kiyosaki
So I joined a savings group which holds me accountable to saving and that has been great. Sometimes you have to accept your weaknesses and find ways around it and a savings group did it for me. But before all these can make sense for you and keep you moving, you need a WHY? Why are you walking this journey of financial growth? When you are able to answer this question for yourself because it is a personal walk, then you need to understand the different types of financial goals and that’s why we are here. In my quest for financial growth, I landed on one big happy life. Just google this. I love her and her husband. She has made my journey so easy. And the below types of financial goals is from her.
1. Financial Independence Goals
These are goals aimed at reaching financial independence. It surely takes the longest time but it is all about the long term. You will ask yourself questions like when do you want to retire? What kind of life do you want to have when you retire? And this leads to other questions like what amount do you need to save to retire at a certain age? What amount of money do you need in your nest egg by your retirement age?
There is a whole movement called Financial Independence Retire Early where people are not looking to the official retirement age of 65 but what to retire as young as 35 and 40. I am on this bandwagon. Sure I can not retire now but I have given myself 8 years to work towards this. This requires one to invest in income-paying assets like stocks, real estate and businesses. Anyone here who wants to give a girl a crash course in stocks? I’d really appreciate it
2. Stability Goals
These goals help us weather life’s challenges that we know will definitely come. And well when it pours, it rains so it’s best to be prepared. The way to prepare is through emergency funds, health insurance, life insurance and even pension funds. We have a pension fund in Uganda called National Social Security Fund ( NSSF). This was the fund not to bother with due to unscrupulous leaders who gambled the money away but over the past ten years, It has gone through a rebrand and gotten leaders who know their stuff.
I can totally recommend this fund now. They even have voluntary contributions for people like me, creatives who well, do not have a 9 to 5. You can contribute as low as 5000ugx..that’s less than $2 a month. Health insurance is not as cheap in Uganda but since I do have health issues, when I calculate it, it is so much cheaper. I have been blessed to be part of an amazing family that covers my insurance. We are all part of a family coverage so that makes it easier on me in relation to health insurance. If you work a 9 to 5, most employers do provide health insurance. If you do not work a 9 to 5 like most of the population, do consider saving for health insurance. I recommend Liberty Insurance.
The emergency fund is money set aside for emergencies when you have lost your income or are sick. This usually constitutes three months of your monthly expenses but COVID-19 has shown us that it is best to get it to a year minimum. Others are even saying go for two years. I think it would be wise.
3. Lifestyle Goals
This goal is also known as spending goals. I know I know! It can be daunting having to spend when you are thinking about the future, saving, investment, and retirement. My Oh My!! But Life is meant to be lived. You don’t want to reach the end of your life and you have oversaved and underlived. So here you are spending on the vision for your life so guess the question is what is your vision for your life? Where do you want to shop? What do you want to experience? What causes do you want to give to? The struggle here is we may underprioritize some things over others and overprioritize others.
Now there are many things I want to experience in my lifetime. I want to travel to every, and yes I mean every country in the whole wide world. I want to experience different cultures, different foods, and different creative mediums. This for me is like Numero Uno. I plan on having a villa in Tuscany on a hill looking over fields of grapes and olives. I want to have a farm home with a boutique hotel and creative hub and a garden like Butchart gardens in Canada. I want to engage in creative experiences like dancing salsa or kizomba, playing an instrument, painting, and riding a Ducati.
All these goals are valid but I sure as hell can not imagine spending it from my income and this is where short-term savings and sinking funds come in. Short-term savings are usually for things that need to happen within the year for example your monthly bills. Here you can create a month ahead saving where you save money to cover all your expenses for the month, for example, now that we are in June, you have savings to pay for July in case clients pay late, especially in the case of creatives or if an income stream dries up, this gives you a month to relax and figure things out for you and if all stays well, you keep your expense money for June for July and July for August so you are always a month ahead.
Sinking funds are for a clear purpose like a new car or travel. Right now, I have a sinking fund for travel. Yes, I have started on my travel dream. I hope to start van life next year travelling across Africa showcasing the beauty and creativity that is our home. I am working on a proposal-hook me up with grants and CSR money nawe.
4. Growth Goals
These goals should be called Me Goals because it is all about investing in yourself. Investing in your skills, knowledge, health-physical and mental, in coaching and mentorship. I must admit here I am 50 50. I am enrolled in one personal development course and another entrepreneurship course but I feel like I haven’t really strategized it all. I want to live in Italy as I said so I have started Italian courses on Duolingo but I definitely need to go to the next step. I need a coach. MMhhhh well, I guess it’s time to think about that.
So where are you on your financial freedom journey? Cheers to us achieving all of them
I liked this article. We are on this journey together I tell you! But now, if you are saving for all these things, where do you put the ka money? Aren’t these too many accounts?
Hahaa I get you.
So my sinking funds, I am using MTN momokash.
Long term savings are in a mutual fund UAP and a SACCO- HMC.
How is yours coming along?