FEATURE: Developing savings culture among youngsters
By Treasure Mayowa
To develop savings culture, we must first fully understand what savings mean in general terms. Savings can be described as income not spent but set aside, or deferred consumption. It is the act of keeping a specific amount of money aside from money earned for the period of ‘rainy day’.
According to Investopedia, saving is the amount remaining after a person’s consumer spending is subtracted from his or her disposable income. It is important one saves because saving enables one to be financially secure and provide a ‘fall back’ in the case of an emergency.
According to research carried out, a major percentage of the world’s population are not saving and in this group are young people who are missing out on the numerous possibilities made available through savings.
As youngsters who are supposed to be the leaders of tomorrow, that should not be the case. It is imperative that the youth develop and nurture the culture of savings in preparation for adulthood that usually comes with huge financial responsibility and commitment.
From studies, savings have greatly helped individuals and businesses survive through tough times. Let us review ways and strategies that encourage savings
It has been established that the media as an effective means with great influence on how individuals, most especially the youth, make use of their time and money. Hence it can serve as a change agent to promote the savings culture.
Social media influence is very dominant among the youth and social media influencers can play a major role in ensuring that young people begin to see the need for savings, no matter how small or big is their earnings rather than being spent thrifts who are interested in spending all their money to impress others. If social media influencers promote savings culture, we are almost sure the rest will follow. It will be seen as a ‘trending stuff’’ and the youths will be like, “This person is saving and sharing their experience, maybe I too should save and gradually become rich.” Saving will be regarded as ‘cool’. It will spread like wildfire.
Parents also have a duty in encouraging the culture of savings among their children. According to studies, it was discovered that parents are more likely to talk to their young ones about good manners and getting good grades in school and values rather than discussing and intentionally encourage savings culture.
This should not be so as one cannot underestimate the importance of savings. When giving these youngsters pocket money, individuals should develop their own method of keeping back some of such money for a later day spending or investment. I would like to suggest that the youth are encouraged to set aside a fraction of their pocket money as savings, that portion must not be spent but set aside for unseen exigencies.
This method has proven to be effective; it may be resisted initially but with persistence, it will become part of the financial discipline required for savings. I know of someone, whose parents were deducting a certain percentage of her allowance as savings. The girl kept on complaining but a time came when she needed a particular amount of money to purchase an item and her savings came in handy. She decided to continue saving by herself. Savings should not be limited to allowance from parents but should also include money gotten from relatives during festive season and visitations and even small business done within the family.
Parents should constantly let their wards know why savings is very important and always emphasise the need to embrace it.
Also, parents can also use their children’s desires. This is a method that makes young people save as a necessity. For example, if the child wants a play station, or a phone or anything at all, the parent can ask them to save half of the money or a percentage of the money for whatever the child desires.
After the child has saved the money accordingly, parents can now replenish the savings and buy whatever the child need or use the savings with their money to buy the item. That makes it clear in the child’s mind that savings is required to get whatever they want.
In addition, schools and the government have a role to play in encouraging savings culture children, especially in secondary and higher institutions. Government could adopt financial literacy early into school’s curriculum to enable young ones develop the habit of conscious effort and desire to save money. Just the way school is essential for success in life, so is saving to financial independence.
Schools can create forms of clubs specific on developing savings culture in the minds of students. Financial awareness programmes can be carried out in schools sponsored by the government or reputable organisations. This will go a long way in instilling the importance and values of savings in young minds.
Parents also should reward their young ones for saving. This is not to ‘bribe’ them into saving but to encourage them into saving.
This method involves parents being active in monitoring their savings patterns. If the child has been able to save up to an amount of money, the parent can reward them by increasing their allowance etc. This will encourage the need to save and the child seeing he/she is being rewarded for it will understand the importance and depth of savings.
Companies can do their beat in making sure the next generation will save as part of Corporate Social Responsibility (CSR). Companies, especially financial institutions can organise saving-based competition as a way of encouraging young minds of the need to save.
Such competition can include mouth-watering prices that should be able to catch the attention of young minds. It will be a ‘catch them young’ kind of competition. This will go a long way to encourage youngsters to imbibe the culture of savings and grow in that consciousness.
It is of utmost importance that our youngsters develop a saving culture, as this in the long run, will go a long way in helping our nation’s financial future. As earlier explained, youths are the leaders of tomorrow and the future of our beloved country. Instilling this value now will help our nation’s economy in latter days.
*Mayowa is a SSS I student of BHMGS, in Lagos.