The Importance Of Financial Literacy In Times Of Economic Uncertainty
By Ajisoodun Samson O.
Financial literacy is not just a buzzword; it’s a necessity, especially in these turbulent economic times in Nigeria. With our economy facing significant challenges, many lives have been disrupted, and some households are teetering on the edge of poverty. It’s like trying to prepare jollof rice without tomatoes – it just doesn’t work.
Young adults in their mid-20s and early 30s often spend recklessly, ignoring essential financial principles. It’s crucial to realize that the decisions you make now can significantly impact your future. Remember, even our parents’ seemingly peculiar habits of saving money and living frugally have deep-rooted wisdom.
Start by creating a budget. List your income sources and track your expenses. Apps like Money Manager or even a simple Excel sheet can help. Knowing where your money goes each month is the first step towards controlling your finances.
Aim to save at least 20% of your income. Set up an emergency fund that covers 3 to 6 months of living expenses. This fund will be your financial cushion in case of unexpected events. Consider using savings accounts with high interest rates like those offered by digital banks.
Learn about investment options such as stocks, bonds, mutual funds, and real estate. Start small and gradually increase your investment as you become more confident. Platforms like Cowrywise or PiggyVest can help you begin investing with minimal amounts. Diversify your investments to spread risk.
Understand the difference between good debt (like a mortgage) and bad debt (like high-interest credit cards). Pay off high-interest debts as quickly as possible. If you must borrow, consider low-interest options and always have a repayment plan.
Take advantage of free resources available online. Websites like Investopedia offer comprehensive guides on various financial topics. Attend free webinars and workshops by certified financial educators. Following reputable financial experts on social media can also provide valuable tips and insights.
Start planning for retirement early. Explore pension schemes and retirement savings accounts. Learn about the different retirement plans available and choose the one that best fits your needs. The earlier you start, the more time your money has to grow.
Protect yourself with the right insurance policies. Health insurance, life insurance, and even property insurance can prevent unexpected financial drains. Compare different insurance providers to find the best deals.
In essence, financial literacy is about making informed decisions to secure your financial future. By budgeting, saving, investing wisely, avoiding bad debt, educating yourself, planning for retirement, and getting the right insurance, you can navigate these uncertain economic times. It’s not about grand gestures but consistent, small steps that add up over time. Equip yourself with knowledge, take practical steps, and you’ll be on the path to financial stability and success.
Thank you