Chinenye and John attended the same primary school for six years. A year later, they both attended different secondary schools and were placed on an allowance of N50,000 by their respective parents.
Chinenye was saving N10,000 consistently monthly in a firm’s fund, while John completely used up his allowance and requested more from his father to support his lifestyle.
After 10 years, John realised his friend made the right decision by saving part of her allowance to secure her future when he began to gain financial knowledge.
Chinenye was able to do so because she was taught financial literacy during her secondary education in the school she attended but John wasn’t taught.
Financial literacy refers to the ability to make informed judgments and take effective decisions regarding the use and management of money. And thus, it goes hand in hand with financial inclusion in terms of strengthening financial depth.
Adenike Ogunyale, head of retail and mass affluent sales at Cordros Asset Management speaking on the importance of financial literacy in basic schools disclosed that financial literacy for young children is very essential so they can imbibe these values at a young age and not be financially irresponsible.
“Because financial literacy is not taught in basic schools many children grow up not understanding the dynamics of investments and everything that goes into financial planning.
They do not know basic financial terms like budgeting, income, expenditure, and how it affects their finances, she said.
As a result, imbibing the investment culture becomes very difficult as an adult and this is why we now have more people becoming better at managing their finances only after they have made bad financial decisions and suffered the consequences, she added.
According to her, this should not be the case, as people should not learn in retrospect, especially young children.
“This is why financial literacy for young children is important so they can imbibe these values from a young age and not be financially irresponsible,” she said.
While shedding more light on some of the initiatives that Cordros currently embarks on to foster financial literacy among children, Adenike said: “We see it as our responsibility to sensitise and educate people about their finances on the one hand while offering products that help them grow their finances on the other.”
“Every year we hold an event called Every Child A Milestone Debate Competition where we bring young children together from different schools and give them financial lectures and also make them debate on topics that centre on financial planning, investments, and other finance-related subjects so they can learn from themselves in a fun way.
“We also go to schools to give lectures and training from time to time. We award these children certificates after these and we also talk to them about starting their investment journey with the Cordros Milestone Fund so they can start taking practical steps early towards investing in the future of their dreams.”
She reiterated that the organisation is actively working on establishing a dedicated club for children and young adults, aiming to foster their understanding of financial concepts such as investing, saving, and other essential aspects of finance.
“This initiative is designed to empower the younger generation with valuable knowledge and encourage them to make the right financial decisions,” she noted.
Thus far, Cordros Asset Management has already made a significant impact by visiting five schools across Nigeria and is eager to extend its reach and positively impact more children and youths in schools and communities across Nigeria and Africa as a whole.
Financial experts believe that one of the most important lessons that children can learn is how to manage their money. Many young people go into adulthood with little knowledge about financial management and they end up making mistakes that cost them a lot of regrets in the long run.
Hence, according to Akintoye Oyelakun, a financial literacy expert at Cordros, “Educating young people about the importance of financial management and making sound financial decisions will go a long way to prevent them from making costly mistakes.
This will also encourage them to be financially prudent when making decisions. Thus, the importance of educating young people on financial literacy can never be overemphasised.”
Nigerian youths need to be more actively engaged in financial literacy to create a more active financial industry participation rate for a demographic group between 16 and 35 years of age.
It is estimated 60 percent of Nigeria’s population is under the age of 25, making it the youngest country in Africa.
Oyelakun explained that children and youths are an important target group for the financial literacy programme. He noted that financial literacy is better learned at a young age instead of in adulthood.
“This is because a habit imparted in the youth at an impressionable age becomes a way of life. Where the youth grow up without financial education, it would be difficult for them to have financial literacy as well as be capable of managing their financial matters in a way that will impact their well-being when they become adults.
“When financial literacy is achieved, it will help to boost financial inclusion in any country-Nigeria to be precise,” he said.