The following 10 steps can be applied by anyone wishing to take charge of their money. They are based on personal experience and lots of research.
- Define what you want in life. This is perhaps the most important step in taking charge of your money. What do you really want? Take some time off. Go somewhere quiet alone. Leave your phone behind. Now really think. What do you want? Whom do you want to become. Dream. Imagine living the life you want. What car do you want to drive? Where do you want to live? What kind of business do you want? What kind of relationships do you want? How much money do you want? Do you want to be in debt? Write all the answers in a note book. Revise this script everyday. Meditate and pray upon it daily. Don’t worry if things are not working at the moment. Simply focus on what you want.
- Determine your net worth. Now that we have established where we want to go, we need to take an inventory of our net worth. Our net worth is our assets less our liabilities. List down all your assets and attach a value. Do the same thing for all your liabilities and loans. The difference is your monetary net worth. Don’t be disappointed if you have little to nothing. Most rich people started with nothing. We also need to take an inventory of our strengths and weaknesses. We shall then capitalize on our strengths to build incomes while minimizing our weaknesses.
- Create a budget. We now need a plan to get from where we are to where we want to be. That plan is called a budget. So we are going to allocate our money in a way which takes us closer to our dream. As you plan keep your eyes on the vision you laid out for your life.
- Build an income. So we have a vision, we know where we are and we’ve created a plan to get there. Now begins the hard part. We need to use our strengths, assets, and skills to build an income. This could be a job or doing anything which give you some money. You really need to focus at this stage to grow an income. Without an income you can’t really build wealth.
- Eliminate consumer debt. Next we tackle consumer debt. Eliminate this completely starting with the smallest loan. Use the debt snowball technique to clear the rest. What we want is freedom. Debt enslaves you and curtails your income from building wealth. So get rid of it.
- Set up an emergency fund. Now that we have cleared the loans, and have some income we need to build some savings. Save 3 to 6 months of expenses in a unit trust to handle emergencies.
- Automate. Build a savings culture and put things on auto pilot by automating using standing orders from your bank. If you have a SACCO deduct from salary before you’re paid. Save a minimum of 10% of your income every month. Increase this amount gradually as your income grows.
- Track expenses. Keep track of your performance by tracking your expenses. Keep comparing with your budget. Do a monthly review of how you’re progressing towards your vision. Install a simple app on your phone. Tracking expenses elevates your level of awareness regarding money.
- Invest and build side hustles. Now we need to expand and build multiple streams of income. Invest in different things. Use some of the savings to diversify your portfolio and grow exponentially. Learn as you invest.
- Celebrate and give. As you begin to take charge of your money celebrate the small and big milestones. Share your new found wealth with others. Teach others what you have done. The keen ones will listen and will be transformed. By giving you unlock heavenly treasures in our life.
Do this consistently for 3 to 5 years and I guarantee you that your life will be totally transformed.
PS. All this info is contained in my book “Take Charge of Your Money.” You can get a copy from Amazon or from Uganda Bookshop. We call also deliver to you. Simply call on 0788437543/0708724953.