Surviving the squeeze: Navigating static income, soaring living costs

The rising cost of living is, no doubt, an economic storm that casts a shadow over your personal finances. 

Mr Julius Mbogo, recently received a Shs70,000 voucher, went to a supermarket but only bought three items.
This, he says, is what it means to have money in the pocket but cannot afford to purchase various items.

Wages have fallen out of step with rising inflation and most workers are seeing their purchasing power weaken. Technically, workers are experiencing cuts in their income with no prospect of wages catching up with inflation.

Living on a static income is stressful, especially now when the cost of living is still rising.  This can lead to financial insecurity and anxiety about the future.

One of the biggest challenges of living on a static income is the inability to keep up with the rising cost of living. 

Mr Ramathan Ggoobi, permanent secretary, Finance Ministry, in his article titled: “Why GDP is your everyday life,” noted that for income or money, we all know how important it is. 

“It is the grease that lubricates the wheels of our daily lives by enabling us to meet the basic needs of life in a sustainable way and with reasonable flexibility,” he said.

In situations where the budget is no longer enough and you can’t buy enough on your shopping list; how are you able to grow your income yet your salary is static?

Plus how can one navigate this changing economic landscape effectively?
Mr John Kakungulu Walugembe, executive director of the Federation of Small and Medium Enterprises, notes that while traversing the tension of a low income amid a rising cost of living can be overwhelming, it is essential to realise that you have the supremacy to shape your financial future.

“By adopting proactive strategies, seeking support, and prioritising your well-being; you can find a sense of stability and build resilience even in the face of economic challenges,” he explains.

During times of economic pressure, it is vital to prioritise your mental and physical well-being. This means engaging in stress-reducing activities like meditation or exercise can be helpful, maintaining a balanced diet  and prioritising sleep can help tackle challenges with a clear mind and a healthy body.

Upskill
Looking for free or affordable courses, online resources will not only lead to increased earning potential and improved career opportunities but also allow you to enhance your skills and become competitive in the job market.

He adds that you can embrace a frugal lifestyle, you do not have to compromise your wellbeing; which  means making choices that align with your financial situation.

“This can be done by looking out for low cost activities, entertainment, exploring affordable transport options, cooking at home rather than dining out all the time. Through adopting  frugal habits, the budget can be stretched to reduce financial strain,” Kakungulu elucidates.

Supplement income 
Supplementing your primary income with side hustles might provide a cushion during such times. This implies leveraging on hobbies and skills that can help you earn an extra income whether through online platforms or tutoring. The additional income will contribute to alleviating psychological and financial stress.

 Plan  ahead
Ms Barbara Kasekende,  head business advisory, Uganda Development Bank,  says if you are looking to grow your  income whether from a business perspective, or a personal perspective; you need to stop thinking of getting quick money, because every time you do that, it creates panic and you fail to innovate.
“Planning ahead helps you generate income for a particular cause. That way you can come up with innovations that can solve problems and plan for your business to thrive in the next five to ten years,”  Kasekende explains. 

  Invest
 Mr  Livingstone Mukasa, chief executive officer at Four One Financial services, says your money habits will define your economic future.
“Increase your savings and investments and double your monthly pay in the next five years. Extract as much value as possible at every opportunity,” he says. 

Taking care of yourself
 Much as I own the business, my money and the money for the business are completely different.  That’s when you consider personal budgeting. This implies that when I get as little as Shs10,000 today, I have to manage it and still save.
 
“Most times when you get money, the first thing people think about is paying for expenses, which is  wrong. At least try to ensure that you pay yourself or give yourself a treat,” she notes.
 
She adds: “When I get my personal money it helps me grow my daily income. 1% goes to tithe, 1% of that money goes towards my parents, another 1.5% goes towards my savings. The true money that is mine is the savings. The other percentage goes towards my expenses around 55% of all income.”
 
In addition,  income includes money from friends and well wishes, even that one, I get like 55 percent of that and that is what I use as my expenses.

He adds that to save and buy land in three years and build a home in six years.  Forget about building a dream house, it will be a standard three- bedroom on a 50X50ft plot.

However, if you already have a home, start paying yourself rent and put it into a unit trust. This money should be used to buy land and build a rental property in the next 10 years.