Re-emphasizing Traditional Forms Of Financial Education For Youths

The average Millennial of today prioritizes making more money over saving & investing and this is, no doubt, unsustainable.

With being “cool” tied to how much you spend, many youths across the world have prioritized spending on the acquisition of expenses or even debt items over building strong assets.

Consequently, we find out that those with 9-5 jobs live from pay check to pay check (possibly borrowing against future income in an unending cycle) and the ones who run their businesses do not separate personal income from business income while also spending all the funds that come in, in anticipation of bigger contracts.

The average Millennial of today prioritizes making more money over saving & investing and this is, no doubt, unsustainable.

According to Forbes, “A third of millennials will never own their own home, personal debt continues to rise and the social pressure to consume has never been so intertwined in the fabric of our existence.”

This doesn’t mean youths are not financially conscious; rather, it shows that as far as financial independence is concerned, they have prioritized income creation over savings and slow and steady investment.

With new possibilities to become a billionaire overnight, this desire has become a possibility and a more alluring option. By definition, financial education talks about one’s ability to understand how money works.

It is also, more importantly, being able to make sound financial decisions. Traditional aspects of financial education that youths need to imbibe include:

Budgeting

The purpose of a budget is to have a plan on how to spend your money juxtaposed with the money you expect to receive. Sound budgeting does many things for you: It helps curtail random out-of-pocket expenses and it helps you derive a clear mental picture of your finances.

With budgeting, excessive spending on entertainment or luxury items will be curbed towards attaining longer term financial goals.

Saving

While the art of saving has been taught over and again, the idea has been overridden by the possibility of making more income. In truth, without good saving habits, all the additional income will still end up wasted.

This is also why many celebrities wind up poor even after making millions during their active years. However, saving is not complete without investment and this is the next point.

Time & Investment Growth

Investment is simply the art of putting your money to work. By having your saved income working for you, you are not restricted to your own abilities or constrained.

You create value and multiply your income by virtue of it and even create sources of recurring income like dividends in the process. While some youths do invest, the final traditional aspect that has been lost is patience and the ability to wait investments now.

One of the best investment opportunities lies within the Nigerian Stock Market. However, this cannot be fully exploited without a clear understanding of the concept of time.

As opposed to investing and wanting to make gains immediately, youths need to learn the concept of time as the amazing multiplicative power of compounding cannot be unleashed without time.

That said, youths are not the only ones guilty of dumping traditional financial habits. By adding these simple concepts to one’s money making goals, the financial position of any individual will be fortified and able to withstand the test of time.

Written by Lawretta Egba.