Tips toTeachYour Child Money Management
With only 38 per cent of Nigerian DGXOWV ÀQDQFLDOO\ literate, according to the Central Bank of Nigeria (CBN), a situation said to have fuelled the challenge of hardship and SRYHUW\ LQ WKH FRXQWU\ HQKDQFLQJ ÀQDQFLDO knowledge of individuals remain utmost importance.
Financial literacy described as cognitive XQGHUVWDQGLQJ RI ÀQDQFLDO FRPSRQHQWV DQG skills such as budgeting, investing, borrowing, WD[DWLRQ DQG SHUVRQDO ÀQDQFLDO PDQDJHPHQW is recognised as the stimulant to a healthy ÀQDQFLDO VWDWXV IRU LQGLYLGXDOV DQG FRPSDQLHV alike.
.QRZOHGJH RI ÀQDQFLDO NQRZOHGJH FHUWDLQO\ KDYH DOLDWLRQ ZLWK HFRQRPLF JURZWK DQG buoyancy, unfortunately, not a few are counting their losses from poor choices due to ignorance and illiteracy that could have been prevented with simple knowledge.
A report by Norrenberger Financial Investments Scheme revealed that as of 2022, Nigerians lost over N300 billion to Ponzi VFKHPHV LQ ÀYH \HDUV
A Finance Coach, Christine Vihishima, believed that the unfortunate incident was due to inadequate understanding of money among the populace.
But Chukwuma Aguwa, noted that the ZRUU\LQJ WUHQG RI ÀQDQFLDO LOOLWHUDF\ DPRQJ adults may not be unconnected to the fact they are not caught young.
“Many young people go into adulthood with OLWWOH NQRZOHGJH DERXW ÀQDQFLDO PDQDJHPHQW and they end up making mistakes that cost them a lot of regrets in the long run.
“Educating young people about the LPSRUWDQFH RI ÀQDQFLDO PDQDJHPHQW DQG PDNLQJ VRXQG ÀQDQFLDO GHFLVLRQV ZLOO JR D long way to prevent them from making costly mistakes. This will also encourage them to be ÀQDQFLDOO\ SUXGHQW ZKHQ PDNLQJ GHFLVLRQV µ
,Q D QXWVKHOO $JXZD LV DGYRFDWLQJ ÀQDQFLDO literacy skills from childhood to grow with it.
Like Aguwa, Co-founder of 9ijakids, Titi $GHZXVL DUPHG WKDW ÀQDQFLDO OLWHUDF\ would empower individuals to break the cycle of intergenerational poverty by being equipped with relevant skills to improve their economic prospects and alleviate poverty.
On catching children early, she said, “They ZLOO EH DFFXVWRPHG WR JRRG ÀQDQFLDO KDELWV from an early age. Imagine having 1 million ÀQDQFLDOO\ OLWHUDWH FKLOGUHQ LQ 1LJHULD ZH ZLOO GHÀQLWHO\ EH DEOH WR HQG SRYHUW\ DQG LQHTXDOLW\ LQ 1LJHULDµ
Thus, as Nigeria joined others across the globe to mark 2024 Global Money Week, recently, THISDAY brings some useful tips to guide children through money management as culled from an alternative investment platform, Grip Invest:
Teach your children about the concept and value of money from an early age. Explain KRZ GLͿHUHQW GHQRPLQDWLRQV ZRUN DV ZHOO as how money can be exchanged for goods and services across various life scenarios. Taking your kids on a trip to a grocery store could be a great start for this.
Introducing your kids to the ideas of VKRUW WHUP DQG ORQJ WHUP ÀQDQFLDO JRDOV can go a long way in helping them plan RXW WKHLU ÀQDQFHV ZKHQ WKH WLPH FRPHV While short-term goals should cater to their near-future plans like going on a short trip or buying a gadget, long-term goals usually UHYROYH DURXQG VLJQLÀFDQW PLOHVWRQHV LQ WKHLU life, like getting married or saving up for retirement.
Enable your children to save money for their goals. This will help them understand WKH YDOXH RI GHOD\HG JUDWLÀFDWLRQ DV ZHOO DV the power of savings. Teach them to save a part of the money they receive, and help them buy toys or goods they would love at a later point using the savings. Using the traditional piggy bank might prove to be an exciting way of building on the habit of savings. You can also check out interactive apps and software that let kids enjoy the SLJJ\EDQN H[SHULHQFH DW WKHLU ÀQJHUWLSV
Tell your children that it is okay to wait for something they want instead of getting it immediately. Such lessons would teach them the values of patience, inculcate discipline in them, and establish a feeling of achievement when they achieve the long-desired goals that they worked for.
7HDFK \RXU NLGV WKDW FDVKÁRZV DUH D ÀQLWH resource that needs to be budgeted wisely. This could also help them understand the concept of spending money on their wants rather than their needs. Also, teach them to track their expenses and budget their allowances/pocket money based on the same.
Kids love learning from interactive content sources, be they illustrated comics or video SUHVHQWDWLRQV Children learn from what they see more than from what they are told. Demonstrate JRRG ÀQDQFLDO KDELWV VXFK DV EXGJHWLQJ saving, investing wisely, and avoiding impulsive spending decisions. Involve your kids in decision-making processes and value their opinions. These lessons would carry bigger value when they see them being implemented by someone they look up to.