By Bashir Rabe Mani
According to Investopedia, financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing.
Financial literacy is the foundation of your relationship with money, and it is a lifelong journey of learning. Financial literacy is also the possession of the set of skills and knowledge that allows an individual to make informed and effective decisions with all of their financial resources.
The three key components of financial literacy are an up-to-date buddget, dedicated savings or savings to spend, as well as the prevention of identity theft.
As it’s always said, “knowledge is power.” Succinctly put, financial literacy is very crucial in an individual’s life and the multiplier effect on the nation’s economy.
One of the most important life expectations for everybody, children and youths inclusive is to be able to track where their money goes, and that starts with budgeting .
Everybody should know how to create a budget, how to track spending and how to save for the future.
On the other hand, saving is an economy of or reduction in money, time, or another’s resource. It is the money one has saved, especially through a bank or official scheme.
It is also the process of setting aside a portion of current income for future use, or the flow of resources accumulated in this way over a given period of time.
Saving may take the form of increases in bank deposits, purchases of securities, or increased cash holdings, among others.
Like already stressed above, both financial literacy and savings culture are crucial for both the country and the citizens.
They are important as its always good to plan well and save for the raining day, so as to fall back on such savings in time of critical needs or even emergencies.
It was therefore on the bid to facilitate the above that the Nigeria Deposits Insurance Corporation (NDIC) on Dec.1, in Sokoto , cashed in on the 2021 World Savings Day trained the students of Sani Dingyadi Unity Secondary School on the art of savings .
In a paper themed,” Understanding the Importance of Savings,” the Corporation’s Director, Asset Management Department, Mrs Emily Osuji, represented by Mr Iwaloye Ehinlaoye, enumerated some benefits of budgeting, which is key to savings .
They include: Making decisions about how to spend money, not spending more than you earn, creating a plan on how to spend your money and distinguishing between your wants and needs, among others.
On savings, Osuji stated that, money can be saved in a bank account, in a wallet or money box at home. She however said that its safer to save in banks, with many accruable benefits like interests, or securing loans.
Osuji emphasized, ” in order to grow your money, you must put aside a portion of what you earn regularly in a safe place that pays interest . This is another way to look at saving.”
Mr Umar Ka’oje, NDIC’s Sokoto Zonal Coordinator, who spoke on its mandate and operations, disclosed that It was established vide NDIC Act No.16 of 2006, sequel to the repeal of Decree No. 22 of 1988.
Ka’oje stated that its primary objectives are to protect the interest of small depositors, promote public confidence and contribute to financial system stability.
” The NDIC was established with the responsibility of administering a Deposit Insurance System -DIS-In Nigeia. It’s a financial guaranty to protect depositors in the event of imminent or actual failure of their banks.
” In doing this, the NDIC insures deposit liabilities of all licensed deposit-taking financial institutions, thereby helping to maintain financial system stability,” he averred.
According to him, membership of DIS, which is a risk minimizer is mandatory for all licensed deposit-taking financial institutions, comprising Deposit Money Banks ( DMBs), Non-Interest Banks ( NIBs), Microfinance Banks ( MFBs) and Primary Mortgage Banks ( PMBs).
The Coordinator disclosed:” In Nigeria, as at 31st August, 2021, there were 30 DMBs,, 874 MFBs, 34 PMBs, as well as 22 licensed Mobile Money Operators-MMOs.
” The NDIC had so far undertaken the liquidation of 49 DMBs, 367 MFBs and 51 PMBs since 1994.”
The State Commissioner of Education, Alhaji Bello Guiwa, represented by Alhaji Aliyu Jodi, lauded the corporation for the invaluable gesture of helping to raise the consciousness of the students and even their teachers on financial literacy and savings culture.
” It is good to plan ahead and save for future use . We are therefore grateful to NDIC for choosing this school which is home to students from across the nineteen northern states,” Guiwa, added.
The Principal of the school, Alhaji Umaru Moyi-Tambuwal said that the event was epoch-making. He added,” it will sensitive the students on the importance of savings. Planning is key to success.
