Nearly every stage in a child’s physical and mental development requires a ‘talk.’ Some of these talks will be about ongoing physical, biological, social and even psychological changes. However, it may be easier to discover teeth in a hen’s mouth than find Nigerian parents or guardians who regard any kind of ‘money talk’ as necessary for a child’s well-being.
Parents work extra hard to secure some socioeconomic advantage for their children. While this dream doesn’t always pan out as planned, proper financial education can help children maximise these opportunities. But many adults can relate to having little to no expertise in handling their finances as they gained independence from their parents. And financially literate kids grow up to become financially responsible adults.
Children are pretty impressionable. They come into their own personalities by mimicking the people around them. Having a spendthrift or frugal parent impacts the way children interact with money as they enter adulthood. Educating children about money is the way to close this endless cycle of financial cluelessness.
4 ways financial literacy can benefit Nigerian children
Financial literacy equips you with the ability to make financially responsible decisions in your everyday life, especially around earning, spending, saving, investing, budgeting and borrowing. That said, here are four ways financial literacy can benefit Nigerian children.
1. To know the value of money
Many children actually believe that money is easy to come by. It explains why they get upset when you’re unable to get them gifts or toys or even necessities you can’t afford. It is your responsibility to teach them the value of money — how it comes and goes. Yes, some information might be excessive for toddlers and primary school children, but there are ways around it.
For instance, for toddlers, you can create a fake currency to trade within your home. They can earn rewards and spend them, depending on your agreement. As they grow up, explain how money is earned and spent. Answer all their money questions. Take them shopping and explain why different brands go for different prices. Start them with an allowance and watch them make choices about how to spend their money. Encourage them to see the value of earning a living and permit them to get jobs when they feel ready. Instilling financial discipline in your child early enough empowers them to be self-sustaining adults.
2. To learn from your past money mistakes
In our experience, many money mistakes can be avoided by actively disseminating precautionary information about potential scams and eradicating the shame around money conversations. A part of financial education for your children should include sharing your past money mistakes, as well as the steps you took to rectify them. This way, they can identify bad financial decisions and habits and avoid them entirely.
3. To manage their finances better
Children who grow up with financially anxious parents tend to pick up on their parents’ worries. Financial anxiety is common among low income families, but it is the job of the parents to manage these fears as passing down this mental burden lowers the quality of your childs’ life, breeding financial insecurity in them.
Learning to be financially intelligent and then passing the knowledge down to your children from a young age can help them attain financial security. Proper knowledge of financial planning can help your children navigate debt, credit, investing, housing and insurance with ease, in order to reach financial freedom early enough.
4. Understanding the essence of saving
Growing up, it was common for children to own piggy banks, aka kolo. Children could save cash gifts from their family members for a specific goal. But alongside encouraging kids to save, it is important to teach them why saving is an important skill to possess in the pursuit of financial freedom.
Luckily, PiggyVest has digitised the savings culture of Nigerians to make it more accessible to people of all income classes. Instead of helping your children “keep” the money their relatives give them this Christmas season, start a Target Savings for them and gain their trust by being transparent and honest about how much they have accrued as time goes on.