Very few Ugandans are confident in their financial situation ~ Finscope Report(2023)

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By Arthur Moses Opio

I kept asking myself whether I should pen this down or not. Let me start with this question, "Are you confident in your financial situation?” For me, my answer is a straight NO and it’s down to many factors. A majority of the factors are external and being in what Kiyosaki termed the rat race just makes it even worse. 

The Finsope report I have been reading says, 

"Very few Ugandans are confident in their financial situation. Only 11% are satisfied with their financial situation. 60% of adult Ugandans are not confident in their financial plans for old age.”

These are some of the things that breed low confidence in the financial situation many of us are in [Some Excerpts Are From The Book, How To Secure Your Financial Future by Dr. Sunday Adelaja]

1. Lack of financial education(Education system designed to only create employees): We have gone through school and many of us have never had a curriculum about money. In fact we know too few things about money that when the topic is raised, it is a taboo.
2. We are looking for miracles (We even have to sow seeds to twist the arm of God): Don’t get me wrong miracles do happen but more than ever, we need people to know that it’s through diligence and working (exchanging your time or skills for an income) that many of us have to embody. We might argue and say, ah! My family and friends have got my back. How long can that be sustained? Emergencies keep coming.
3. We have financial goals but many of them are not clear, they are vague: e.g I want to earn 10m, how can that happen if it’s not specific. We have no strong reasons to even backup why we need the 10m. 
4. We don’t pay ourselves: When we get paid, we pay everyone else but ourselves. The solution is to put yourself on the payroll.
5. We are not part of a supportive environment: Our environments determine a lot how we interact with this money thing. So many years ago, a colleague pushed me to get a loan but I got denied. No one was pushing me to invest but I was just being told, since you earn a salary you can get a loan but for what.
6. The world system is a trap in itself - Imagine, we try so much to keep up like the Jones, David’s and Michael’s: We have basically bench marked our lives against so and so, it’s even worse if they are on social media and we don’t know them personally. I imagine the village man has less money pressures, he can’t go homeless because he has built his hut but here in the city where we can’t grow food, you pay for almost everything, without money, life sacks,  in the US, people go homeless.
7. Celebrities: We have a dominant culture that celebrate Celebrities. In the previous years, everyone wanted to be like Mike, so we were sold AIR Jordans and to have one was to show that you have arrived. DSA says, "Advertisers and companies parade them and use them to sell products. They know the culture has esteemed these athletes so much, everybody wants to be like them. Advertisers have used campaigns like “BE LIKE MIKE” to sell us shoes and other products because they knew people wanted to be like the legendary American basketball player Michael Jordan. Even entrepreneurs who have made billions within 5 to 10 years are constantly in the news. We are always told how much they are worth and the size of the companies they have built. They have superstar status around the world. They are ranked in world famous magazines such as Forbes in order of their wealth; the one with the highest net worth is ranked first. As a result, many people are living for achievements, to make money so that they too can be celebrated.”
8. Debt Trap: The argument of debt is not one many of us can win. Yours truly was educated through loans and I think the gist of the matter comes down to management. I would argue not to go for it unless you are getting to top up on something you have already started and need a boost but I might be wrong and stand to be corrected. I just know debt can be one huge trap. Banks are aggressive in Marketing debt products. To wed, there are now loans ready to be quickly cashed in. I will share a few stats on debt later on.

We need to do soul searching to help us in this area. If only 11% of Ugandans are confident of their financial situation then how about the 89%. Many of us are in the 89% bracket but the good news is the knowledge is there. Over the weekend while having a chat with a couple, one of them remarked and said, "I have the plans, the only problem has been execution. What I learn from your talk is that I must get out and execute."

I once learnt that, "The only way to permanently change the temperature in the room," said T. Harv Eker, "is to reset the thermostat. In the same way, the only way to change your level of financial success ‘permanently’ is to reset your financial thermostat.”

I got a message from a follower on X and this is what he said,

"I am grateful for your guidance into @XenoUganda. I have experienced growth personally and with my family on the values of savings and investment. Not only me, but My friends and relatives are Learning with me as well"

How we respond to external factors is also key in developing confidence. The stoic Marcus Aurelius says, "You have power over your mind, not outside events. Realise this, and you will find strength." - It is also written in the scripture, "As a man thinks so is he." So yes, we can only control our mind. Like my friend who decided to ask about Xeno, learn and start investing, his testimony is clear that he has experienced growth.

So let us build our financial confidence by reseting, by dealing with the root not the fruit. Let God guide you and I as we do our self reflection.

70% Ugandans survive on borrowing - FSD Uganda Study

Photo by Towfiqu barbhuiya on Unsplash

By Arthur Moses Opio

We all read that statement that was screaming on the Daily Monitor news paper on 15 April, 2024. The report is based on a study by FSD Uganda and it said, "Seven out of every 10 Ugandans were operating a personal budget deficit(needing more money to than they are earning to cover their personal budget" Now, 70% is huge. What are the 30% doing that the 70% aren’t doing? The report continued to say, "More Ugandans are relying on their family and friends, personal savings, and borrowing to manage their budget deficits than was the case in 2018."

What’s notable in this, is that Ugandan’s have personal savings and compared to 2018, 60% of Ugandans are now saving which is a good thing. In their 2017 SDG report, Afro Barometer said, "Ugandan’s saving rate was at 12% compared to Kenya(23%), Rwanda (18%) and Tanzania (13%)" Generally we have been doing badly. I need to find out what our stand is currently but an improvement of 60% should be applauded. 

But saving is not enough, it is the first step. Even if savings is up. Finscope report says, "Most Ugandans are not managing their budgets well." and failure to manage picks into things like extensive borrowing to meet a budgeting deficit as stated above. If you are lucky to have personal savings that is good, then the only worry is that you are probably eating into your wealth building tool. Savings should be categorised, emergency savings and investment savings. 

You can make and save money, but if you are having more months than money, the problem is not the income. It's your money management. We have to develop high income skills levels to enable us manage this money resource well. 

Paul Busharizi once wrote an article titled, "Perpetuating the poverty among the elite" and said, "There is the Urban legend of the manager who cannot make his salary stretch to the end of the month, while his driver who earns a fraction of his salary, not only gets to the end of the month, but has enough left over to invest in his growing empire of mizigo rentals." He further said, "The difference between the two men is that the boss is focused on consumption lifestyle while the driver is focused on investing. And that is the crux of the matter. There are only two ways to spend your money, you either “eat” it or invest it."

There is no doubt economic times are hard but we have to be smarter. Money management is a skill that we all must harness. Even if we are doing fairly well, we must keep learning to avoid slipping back. So manage whatever little  money you have well. It's a much needed skill. We are all victims of poor financial management but we can be better.

So these are some of the things the 30% are doing:

1. They have financial goals.
2. They have a financial plan.
3. They have a budget.
4. They track their expenses
5. They live below and within their means
6. They are investing in appreciating assets like Bonds, Treasury Bills, Fixed Deposits, Unit Trusts that offer at least 10%. They know there is a limit to how much they can cut their expenses, so they focus on increasing their means.
7. They are involved in producing goods and services. If they aren’t directly producing, they own shares of companies that are producing goods and services.

So once again, I remind us, let us build that emergency fund. UGX 1,000,000 is a good target to begin with. In case of a challenge, you will have that as your first rescue point. It is your fire extinguisher, you need it badly, I badly need it. 

Don’t ignore the power of putting 10,000 UGX aside, if you do it for 7 days, that’s already 70,000 in your emergency pot. XENO CIS allows you to save as low as 10,000 UGX, you can dial *165*5*7# my referral code is XENO84105. 

For more information about XENO click this link.