Question: Sadiq Lubega; What percentage of my salary do I need to save before I accumulate enough to build my own house? Answer: Dear Sadiq, there is no set amount for saving. I have said it before that money is very hard to save ,especially where the goal is vague. You can build a house […]
Question:
Sadiq Lubega; What percentage of my salary do I need to save before I accumulate enough to build my own house?
Answer: Dear Sadiq, there is no set amount for saving. I have said it before that money is very hard to save ,especially where the goal is vague. You can build a house at 30M or 300M in Kampala. Its really up to the means you have.
My advice is to set a SMART goal for the house you want. It’s always best to have a goal which informs your purpose. So, you will specify what kind of house, where, how, when why you will have it. Be as specific as possible e.g a 2 bedroom iron sheet roofed house, have measurable targets, ensure the targets are achievable and Time bound.
Then based on your salary, see how long it would take you to achieve these goals. If for example you earn 800,000 and you want a house of 30M UGX, you look at what realistically you can keep at the end of the month. I see 50% saving as possible.
So, once as you get paid, you deposit this either on a Fixed deposit or at a hard ware shop. Note, you save first before you spend not spend and keep what is left. If you can’t trust yourself with saving, you can take a loan which in a way will be a forced saving. Make sure you use all the loan money to work on your dream. There is nothing as terrible as ‘eating’ loan money because paying back will be so hard.
You will need to adjust your expenditure. When I was building my first house, I stopped drinking, cooked and packed my own meals and stopped social donations. Walking to work served both as exercise and a way of saving. The sacrifice will be worth it.
Once you have something substantiation say 10M, you can start building and keep saving in terms of labour and materials. You will be surprised at how much progress you make. In about 6 years, you might be living your dream.
