Financial Discipline: why people don’t have it and what one can do to learn it

By Wanambwa M. Rogers

Embarara Farm Lodge

We were having a discussion with a friend of mine who was always complaining that he doesn’t know where his hard earned salary disappears from. Every time he is paid, in a week, all the money is gone and he cannot even account for it’s expenditure. It got me thinking about a subject I’ve had to learn the hard way, Financial Discipline. Many people are so financially undisciplined that if they were just to change their financial handling a little, the things they could achieve are so tremendous, no one would believe it. Let me talk about how to do that in details.

Discipline, according to the Merriam Webster’s dictionary is defined as, “a way of behaving that shows a willingness to obey rules or orders.” From this simple definition, we can them deduce that Financial Discipline refers to how well you’re able to conform your spending and saving plans that you have set to achieve your monetary goals.

That sounds simple, right? Wrong! Many people have failed to. You see, from Economics, we know that in order to generate streams of income, you’ll need to first of all, earn one stream of income, be able to save and then most importantly, be able to make wise investments that will help you redeem back your money/capital(at a given pay back period) and the cycle continues. Men like the greatest investor alive, Warren Buffet(with a net worth of over $86billion by 2019) have mastered this. This whole process covers several things, Capital Investment Decisions inclusive. Maybe I’ll talk about those on another day, however, I digress, back to the topic.

From the previous paragraph, given a person saves or is able to save Ugshs100,000 every month, it’ll take this person twelve months(one year) to save Ugshs1,200,000. If she invested one million out of this money in a money lending business, where interest rate is a modest 15%, and she didn’t touch that money for the next year, compounding this money would give her Ugshs3,138,428.38(using the Net Present Value method). This means that her one million generated a profit of Ugshs2,138,428.38, which is a 213.84% profit. This example is from a business owned by a person I know who wanted to remain anonymous when asked.
So given such interesting figures, why would one not see such opportunities and take advantage of them like my friend I earlier mentioned?

There are many things but the most common thing the people I interviewed for this article said was peer pressure(or you could say influence). Jane(not real name) a sales agent of Prudencial Insurance said whenever they’re are paid, all her colleagues go out for a couple of drinks(and a couple doesn’t mean only two) which makes a dent into her meagre salary before she even reaches home. Add rent and utility bills on top and all the salary is gone in the first two days.

Looking after many dependants was another issue. So many people are the sole bread winner for a large number of people. Add the crazy unemployment rates and it’s a pottage(katogo) on fire. Such a person cannot save anything. 70%( which is around 29million) of Uganda’s population is between 15-30years and many of these are unemployed. The other 30% entails of the young children, the elderly and the adults.Many of these too are unemployed.

Under and disguised employment are another problem. Many people are paid peanuts for their tolls which makes it impossible for them to save.

Taxes on all kinds of these make the ones in business also save next to nothing many end up operating on losses. All these and many other things make people not to save. Other issues included high costs of living, high tuition fees for children and the like.

Now, with such constraints, is there hope? Let delve into that:
Before I talk about any solution, you should know that real wealth is made over time and hence it’ll take you time to get there.

From that particular statement, it is only fair that I start with patience. You need to be patient. Rome was not built in one day and all that. Jeff Bezos, the richest man according to Forbes(networth $121bn) started in a garage, so did Bill Gates(net worth $106bn) and even the Google owners(yeah, uncle Google was born in a garage too). All these people had patience as a common factor.

You’ll also need to cut off some people from your life. This may sound crass but it actually works in your favour. But they say we should network, you may argue, however such networks as those which they talk about are not the ones where you sit together and procrastinate about life.

Networks should be about elevating you, getting yourself role models who have time for you and who will inspire you and help you get where you want to be. Other than that, those big numbers of friends may be a problem for you.

Speaking of which, you should check your lifestyle. Many people live beyond their means. Why do you a person earning Ugshs300,000 want to own a Ugshs2million phone? Not to say you who’s unemployed and you want to hold the latest iPhone. As your employed friends go “to wind down” after a stressing week. Stay home, you didn’t have a stressing week, you were watching movies and sleeping, that’s not stressing.

Away from that, you need to make a list(call it a budget) of your estimated expenses and incomes and weigh what is more important. That should be given first priority. For a single mother, making sure you and your child have food, rent is paid and there’s some money for emergency, like an abrupt fever is what’s priority. A weekend at Embarara Farm Lodge is definitely not priority for you.
Stick to your budget. “These things of impulsive buying are for children,” and you don’t want that. You should know where your limit is and never, as in never go past it. Any extra dime should be going to your savings and investment plan.

Speaking of which, open up a savings account. Yes, do that and it’ll help you start on the savings journey. Better yet, join a saving entity(read local SACCO in your village). You’ll be amazed at how serious guys in these SACCO’s are when it comes to saving!

Did I say you don’t have time for Embarara Farm Lodge? Well, even so, you can always occasionally give yourself a treat, you’re human after all. Pamper yourself a bit. This will help you be settled in your heart and relieve stress, helping you rejuvenate and get back in the game of money making.

Talking about giving yourself a treat, you should also change your environment. Creativity comes from such things and you may be surprised with what you get to learn when you go to new places. For example, do you that you can get an acre of land at less than Ugshs5,000,000? Remember, in the business series I told this piece of land alone can get you up to Ugshs18million a year.

Lastly, but not least of course, get support from others(And the LORD answered me, and said, Write the vision, and make it plain upon tables, that he may run that readeth it. Habakkuk 2:2). People will be happy to remind you about what you told them you were going to accomplish. Whether they say it in good or bad faith, the important thing is them reminding you.

So get started.