Financial Responsibility: Preparing teens to make the best financial decision

If you ask most teens or kids in their pre-teens what it means to be financially responsible, I am sure you will get a lot of remarks mired in confusion.

By Op-Ed Contributor

Growing up in a family where the discussion of money was the white elephant in the room, I never realized how much or how little we had. I had no appreciation for the naira nor how to be a thrifty shopper. I was ill-prepared to manage a budget or make wise money choices as a college graduate. As I got older and more financially conscious, I realized that if it wasn’t for my minimalist parents, their wise decision to open a kiddies account for my siblings and me, as well as generous relatives with deep pockets, I couldn’t have imagined where we would be today, financially speaking.

Several life lessons opened my eyes to the importance of financial responsibility, which is why I think it’s incredibly important to teach young children how money works and how to wisely use it.

If you ask most teens or kids in their pre-teens what it means to be financially responsible or if they have teens accounts, I am sure you will get a lot of remarks mired in confusion.

This is why I will like to share some practical ideas for imparting financial responsibility in your teenagers, as you prepare them for their future.

How to teach your kids financial responsibility

Having that money talk with your kids as they grow older may be a hard nut to crack. With this in mind, I have curated a checklist to help you prepare your kids as they navigate the tricky waters of personal finance.

• Be the example

Several teens rely on their parents to set the right examples when it comes to money management. As parents and guardians, we play a crucial role in shaping our children’s financial habits and attitude towards money.

A great way to set the right example as your teens grow older is by including them in some of your financial decisions, for example, showing them how you get better deals on groceries, or how you use a budget planner for your monthly expenses.

Let them in on your budgeting process for household supplies, essential bills and gradually introduce them to how you sort your taxes or pay your mortgage.

Very often, children mimic the financial habits of their parents or guardians. If your children see you as the type of person who saves up to buy something, then they are more likely to do the same but if they notice you’re quick to turn to credit to fund non-essential purchases, they most likely follow suit.

• Give your teens the freedom to manage their own budgets

This will teach a vital lesson and help them understand that money is not an unlimited resource.

Allowing your teens manage funds early will help them recognise the value of money and teach them the importance of spending only what they can afford, and help them avoid the drawbacks caused by unplanned expenses.

You can also introduce them to banks with teen accounts and talk them through everything they need to know to ensure they open the right account.

• Pocket money and budgeting

One of the ways to teach teenagers financial responsibility is giving them a set budget for a specific task.

Pocket money offers the first taste of financial responsibility to a lot of children. Giving your kid a regular amount of money and the sole responsibility of paying for things they like, offers them the first glimpse into life and how to stick to a budget.

An example could be providing them with a monthly budget for their meals and allowing them spend the funds as they like; if they choose to spend the money on other things other than their meals and they run out funds, they’d learn a valuable lesson about budgeting and discipline.

Teenagers, who receive regular, fixed sums, are likely to keep track of their financial incomes and spending. A crucial part of teaching your teenagers how to manage their finances is to be strict with the money you give them and ensuring you rarely ever bail them out when they overspend. This will teach them that overspending can lead to the problem of debt.

• Share tales of your financial mistakes

Opening up to your kids about certain financial mistakes you have made in the past and how they hindered you is a good idea. These stories are a great way to highlight the dangers of poor financial habits. This could mean telling them about how you incurred debts because of a bad spending habit on unnecessary items.

By sharing some of the financial mistakes you made when you were about their age, you will be teaching them valuable financial lessons.

• Help them Develop a Savings Culture

Teaching your kids, the importance of saving and only buying the things they need is a crucial part of shaping their adult lives.

This could mean encouraging your kids to set aside a small amount every month to buy a new pair of shoes, or teaching them how to save long-term for bigger projects.

This habit and financial discipline will make it easy for them to achieve their long term goals of going to college, paying their mortgage or buying a car as they become adults.

Talking to teenagers about the need to save can be quite tasking, so it’s a great idea to introduce them to saving by leveraging their interests.

If your kid is interested in fashion, you can help them work out how to meet the cost for items they will like to get. This could mean teaching them to set aside a certain amount of money monthly, or helping them secure part-time jobs.

• Teach them how to manage their first wage

Helping your teenager secure a job is one of the important steps to financial independence. This will also help increase the amount of disposable income they have access to.

Younger kids who still go to school can take up informal employment like babysitting for family friends, while teenagers over the minimum school leaving age can take up full-time employment. This will play a key role in preparing them for the future and is also a great opportunity to instil in them the importance of saving some of their earnings for rainy days.

An example could be, if your teenager would like to buy some fashion items, makeup or the latest PS4, you can show them how to set-up a standing order to their savings account on every payday. This way, their savings is automated and it so much easier to stick to a budget.

 

Written by Mariam Barry

 

Top 5 finance tips for the 21st century working adults

These tips would help you become more conscious of those unnecessary things that eat up your finances.

By NM Personal Finance

One of the key concepts of the world is how hard it takes to make money, to live comfortably but how fast we spend the money earned through those arduous tasks we have to carry out. In this diverse and growing economy of the 21st century, being able to stay on top of your finances is a big deal. It might be quite overwhelming trying to manage how you spend your money, and it could be that there are just a lot of things to pay for or buy.

We all want to be more financially responsible. However, many of us fail in this simple yet difficult task. Saving money, no doubt could be quite tough, as there is always something to buy or a payment to make.

Effectively managing your finance is straightforward. Nonetheless, here are five (5) financial tips for the 21st-century adult. These tips would help you become more financially adept, and also more conscious of those unnecessary things that eat up your finances.

1. Avoid debts: A significant hindrance of financial independence and saving money is debt. The last thing on a debtor’s mind is how to save. Debt robs you off of your income because before you receive that next pay cheque. It means you have to service debt from the limited income you have and you also have to take care of needs from that same income. On that basis, it is advisable for anyone seeking to save more to avoid debts. And if you are in one, you should look to pay it up it, as that would help you balance your books better.

2. Keep rainy day funds: Another very important tip is to have a rainy-day fund or a savings plan. This is one tip that can seem very tasking, especially when you do not make big numbers as your income. Nevertheless, it is very important to save money no matter how small. Having a trusted saving plan can come in handy in the oddest of moments, it saves you from having to take a loan from a friend or a bank.

3. Have multiple income streams: Having multiple streams of income is a total must-have for anyone seeking to be financially adept in this 21st century. Recently, due to the outbreak of the novel virus, coronavirus, businesses were shut, and offices were closed. This means that people who are solely dependent on what they earn from either their store or shop or office were practically unable to earn as much as they would have. But people who had multiple income streams were able to easily bank on their side hustles or side work during the enforced lockdown as a means of getting an extra income especially for those whose offices were unable to pay salaries or business owners who were unable to open due to the lockdown.

4. Financial calendar: Helps you monitor important financial dealings you have over a particular period of time. Dealings could range from salary payment to fixing your car, school fees, savings/ emergency funds or as little as buying a birthday gift. Having a calendar helps remind you of this important thing in case you forget.

5. Save automatically: One of the easiest ways to save more money is to save automatically. Automatic saving helps you to put that extra cash out of your mind and out of your sight. You are left with only the amount available in your account, and that is what you are left to plan with. Automatic saving means a process where you have a place or an account that you save into at regular intervals, which could be daily, weekly, monthly, quarterly and even yearly. Many do not know that setting up a bank account to automatically transfer funds from your account into a savings account is feasible. All you have to do is meet your account officer, explain your plan to him, and he should help you in your plan to become more conscious of your savings. And if you consider that to be too cumbersome, there are multitudes of saving apps that you can automatically set up which would help you save your money. Automatic saving saves you the stress and hassle as the money is automatically moved immediately and you would have no access to it until a certain period of time which you might have decided on earlier.

There is really no secret behind effective finance management. The truth is that anyone could succeed financially, when they are perceptive and focus on the future and if we do not allow our wants to dictate how we spend money. It all boils down to financial etiquettes, and if you lack that, we believe that you will find the above-mentioned tips helpful in keeping you disciplined.

 

Spending strategies to help you live within your budget

The secret to living comfortably within your budget revolves around planning, proper spending, and saving.

By NM Personal Finance

Going through the cycle of earning yet battling with financial struggles is an encounter a lot of people fear, but they are often faced with it due to the financial lifestyle they uphold. A lot of individuals experience financial strains because they lack the knowledge to plan their spending which usually lands them in a situation of amassing debts that get difficult to manage. Strategizing your spending is not an easy stride, yet it is not impossible. To live a happy and debt-free life, some strategies have to be put in to achieve such.

Here are spending strategies to help you live within your budget:

A sound financial mindset is essential: The opinion or belief people hold about their finance exerts a great influence on how they utilize it. Your money mindset or the value you place on your finance will boost your habit of evaluating your income and investing in worthwhile expenses. It is important that you have a clear understanding of your earning status and what it can be used to achieve.

Set goals: To avoid impulsive spending, you should have spending goals or budget put in place for your income. Setting goals come in handy to check how and what should be spent on. It helps one to know the exact things to spend on and to differentiate between wants and needs i.e. things that can be laid aside and those that are really needful and pressing. Cultivate the habit of writing down your goals and following them by the script. A good trick to use is dividing your expenses into sections and allocating a percentage of your income to them.

Needs or Wants: Many people constantly struggle with the pressure to live up to a particular standard that is way beyond their income, which eventually leads to a financial disaster. For someone willing to live within your budget, you should always evaluate your lifestyle by asking if the things you spend your money on are really needful. Ask yourself if you really have to buy the things you buy or you can do without them. On the other hand, you can save a particular percentage of your income for some other luxuries, but bear in mind that it should in no way affect your important expenses. Instead of accumulating massive bills because of your desires, you have to weigh your wants and needs and strive to spend more on needful and essential things.

Set Limits: Of course, if you don’t need it, you can do without it. Set spending boundaries to curtail some of your wants. Your spending rate should align with your earnings. You risk placing yourself in huge financial stress if you spend more than you earn.

Boost your income: To spend more comfortably, you need to earn more. One of the best strategies to live within your means is to look for other sources of income. Some ways to increase your income include doing extra jobs, monetizing your skills and starting a new business.

Save up: The journey to financial stability cannot be achieved if saving is neglected. In addition to storing up for future possible emergency, nurturing a habit of saving also instils a sense of discipline. One of the ways to practice saving is to cut down on avoidable expenses and save instead.

Living within your budget connotes having a sense of financial stability and learning to cut your coat according to your size. To avoid running into debts, one has to be mindful of how they spend and uphold it as an important habit that needs planning and evaluation. The secret to living comfortably within your budget revolves around planning, proper spending, and saving.

Personal Finance

How to cut cost amidst the COVID-19 pandemic

An increase in expenses followed by a decrease in income calls for a serious cost reduction.

Published 5 days ago on September 3, 2020

By NM Personal Finance

When people say ‘unforeseen circumstances,’ nobody ever imagined an unforeseen circumstance would be as huge as the Covid-19 pandemic. The pandemic brought with it, a lot of unimaginable and unexpected changes, especially to the economy; the Covid-19 pandemic has had a great toll on the world’s economy. While some industries like the; gaming, media, and healthcare industries are thriving during the Covid-19 pandemic, some companies are experiencing a huge decline that would make them resort to cutting cost.

An increase in expenses followed by a decrease in income, calls for a serious cost reduction. Companies that want to stay in business and want to have saved enough for post-pandemic have to strategically cut costs. It is not as easy as it sounds because cutting costs means stepping on some toes but it is the most logical thing for all businesses to do.

Below are some ways you can cut costs amidst the pandemic:

Get cost-cutting ideas from your employees 

The first and most important thing to do is get ideas from your employees on how to cut cost. Doing this will make them understand that the company cares for them and is interested in their opinion. Many of them might end up volunteering for a pay cut or unpaid leave because you have put them in a situation where they can empathize with the company. At this point, they won’t have any problem with the decisions you make even if it is going to affect them at the end of the day.

Partner with other businesses that are not competitions 

If you have a small and growing business that might be significantly affected by the pandemic, you can partner with another business that is not a competition. For instance, you can share your workspace, internet, equipment and other essential things with another company to reduce rent and other costs. If the system works for you, you can continue with the arrangement post-pandemic.

Cut non-essential spendings

Cut all spendings that don’t contribute to the growth of your business directly. Apply the rule – “if we can do without it, we don’t need it” – to your business.

Try alternative and cheaper ways of operating

Businesses can cut back on expensive tools or methods of operating. For instance, if your business relies on marketing, you can try affordable marketing strategies that won’t cost you a fortune and would still help you to remain visible in the business world. Covid-19 has proven that email marketing and social media are effective marketing tools, and many businesses should adopt these tools to remain relevant in their industries. You can also replace other expensive methods of operation with cheaper ones.

Reduce payroll expenses

A company’s payroll makes up to 15 to 30 per cent of their gross revenue. According to Secondwind Consultants, businesses fail when their payroll exceeds 30% of their gross revenue. Businesses can cut payroll expenses by cutting some bonuses, compensations and incentives enjoyed by the employees. Companies can also introduce remote working, part-time work or limited days to reduce pay. These measures, as unpleasant as they might be for the employees, are good ways for businesses to remain strong amidst the pandemic.

Renegotiate fixed fees

The pandemic has forced many to be considerate and understanding, therefore, business owners should seize the opportunity to renegotiate some fixed fees like rent and subscriptions. While renegotiating might be favourable for some, it might not yield any result for others. However, it won’t cost you anything to hope and see if you can reduce cost through this method.

Establish a hiring freeze

If you are not in the health care industry and other thriving industries, the last thing you need in your company during the pandemic is a new workforce. Companies can encourage and train their employees to take on other roles pending the time things go back to ‘normal.’

Reduce the company’s workforce

As heartbreaking as this might sound, to cut cost, some companies may have to lay off or terminate some of their employees. However, this should be the last option for any company looking to cut cost.

This period is not the time for businesses and their employees to live in luxury. It is the time to get rid of the non-essential and unimportant things companies invest their money in. What all businesses should strive for at this stage is; coming out of the pandemic strong, if possible, stronger than they were.

 

7 traits to help you succeed and do better in the business world

Some important personality traits to adopt to help you do better as you manage your business

Published 22 hours ago on September 7, 2020

By Raheem Adebayo

Business is an art, and not everyone knows to master this art. Some people have the inborn qualities to be successful entrepreneurs, while others work to develop these qualities. No matter which of these descriptions best fits you, everyone can benefit from continuing to improve on these important characteristics.

Here are some important personality traits you must adopt to help you survive and do better as you go on managing your business:

Passion

The first and foremost quality of a successful entrepreneur is passion.  No one can achieve anything if they do not have the passion for reaching that goal. Motivation keeps blood running, helping an entrepreneur to keep hope and overcome obstacles as he or she advances towards the goal. This is why a successful entrepreneur is passionate and motivated in a whole new demeanor.

Sir Winston Churchill once said, “Success is the ability to go from one failure to another with no loss of enthusiasm.” As an entrepreneur, you are going to fail. That is just an unfortunate fact. While something that drastic would be too much for most people to handle, an entrepreneur has the uncanny ability to get up and dust themselves off.

Flexibility

Being able to adapt to changes and challenges is crucial for any business. In fact, most entrepreneurs will inform you that their ideas or business plans are drastically different from when they began. An idea may be brilliant, but ineffective in reality. Entrepreneurs are flexible enough to make the adjustments for that idea to be feasible. Furthermore, entrepreneurs are prepared and willing to modify their plans when new information arrives and when there are changes in circumstances.

Vision

Entrepreneurs see opportunities everywhere. They are innovators who are always on the lookout to either develop new ideas or improve existing products or services. And, chances are that is the main reason why they became entrepreneurs in the first place. At some points in their lives, they noticed things that could be better. But, just saying that things could be better wasn’t enough. They actually put plans in motion. In other words, entrepreneurs have the ability to see the future before it happens.

Taking abstract thoughts and making them linear

It seems like everyone has an idea that they think is the next big thing, yet very few of those people ever take the steps to execute on it. Those that do often flail around while their ideas die a slow and painful death. The problem here is that you need to be able to take your idea and visualize the entire process, from creation through sales and beyond, in order to have a real chance at executing it effectively.

Function well under stress

Startups are a grind. If you are one of those people that cannot operate well under stress when the stakes are at their highest, you will most certainly fail. You must be comfortable being a bit out of control because there isn’t a playbook for a startup — most of what you are going to do is learned along the way and won’t be part of your plan. If, however, you are one of the few whose performance actually step up under stressful conditions, you’ll be well suited for the startup lifestyle.