Financial literacy
By I welcome readers to this new column. We would be discussing issues relating to our personal financial well-being and how to become faithful stewards of our personal financial resources and ultimately grow our personal wealth ethically and profitably. In short – financial intelligence. We spend many years in formal education developing our mental intelligence. Even our emotional intelligence receives training from our parents at home. However, there is no avenue to develop our financial intelligence because our schools’ curriculum is lacking in this and many of our parents themselves lack basic financial education. In adulthood, we continue to ignore our financial intelligence despite the fact that the negative consequences of this great omission are clearly visible in our circumstances. But we are not totally to blame; in many circles, discussing money is considered vulgar or at best a demonstration of a lack of faith in God. In addition, many people do not have good financially successful role models that are able and willing to put them through personal financial management training (Financial literacy).
Financial literacy is lacking in our communities and many people – male or female, old or young, educated or literate – do not understand the basic principles of financial management.
Lack of Financial literacy ( financial illiteracy) is a major cause of the problems we have in our socio-political sphere because many of the leaders we entrust with our national finances have not excelled in personal finance. A sizeable number of the so-called businessmen turned politicians are either juggling several bad bank debts or have been beneficiaries of inflated government contracts. They have not been successful in personal financial management, how then can we expect them to prudently manage national finances?
So what exactly do we mean by Financial Intelligence?
It can be defined as a working knowledge of the most effective avenues to
- Manage finances
- Grow wealth
- Reduce financial leakages.
In Financial literacy, financial intelligence has become an essential life skill now, more than at any other time in our nation’s history. With the recent depreciation in the value of the naira and the attendant reduction in the purchasing power of the average Nigerian household, everyone needs to be financially intelligent in order to ensure that every naira owned creates the best value for us. Parents must expose their children to Financial Literacy from an early age – so as not to perpetuate the negative money habits in succeeding generations.
In discussing our finances, we would be looking at Financial Planning and Budgeting, Effective Savings Strategies, Assessing Expenses, Effective Use of Credits, Investment Products and Avenues, a Layman’s Understanding of Financial Reports, Risks Management, Estate Planning, Dependants’ Planning, Financial Education for Children, Financing Cultural Obligations, Banking and Non-Banking Financial Services and more. We would also from time to time discuss Current Affairs that can impact Personal Financial Well-being.
There are principles for the effective management of personal finances and we must master these in order for us to be able to generate the finances to not only satisfy the financial requirements of life’s special (and even ordinary)events but to have options whilst doing so.
Financially dependent or financially struggling people don’t have options – they just do whatever their finances can cover. But with financial independence we have options; we can choose any school to send our children and in any country; we can choose where spend our well-deserved annual leave; we can choose what kind of theme to have at our wedding reception; we can choose to buy the car we like and not the one we can afford whether we really like it or not. Life is more colourful where there are options.
Someone may say, ‘BETTER is little where there is happiness than plenty where there is strife.’ I’ll reply with something I heard a wise man say: ‘BEST is – plenty where there is happiness.” It is not an “either or” situation as we have been erroneously led to believe, we can have both. The ‘either or’ mindset is the consolation of the financially challenged.
I now challenge readers to strive for the ‘BEST” – having plenty together with happiness. If we adopt and diligently practice the ideas to be discussed in this column we would soon be on our way to that “BEST” destination.
Come along with me.
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