Never too young to manage your finances

Published On: March 30, 2018 07:47 AM NPT By: Priyanka Gurung

Gaurav Thapa from FinLit Nepal talks about the 12 Lamjung schools where they engaged secondary and higher secondary school students in personal finance management workshops. At the end of the training, he shares that they even handed the 100-200 students with their own individual piggy banks and asked them to save money. A month later, they followed up on the students and, together in masses, broke that piggy bank to see the money that they had managed to save up. 

Just like that, says Thapa, they had managed to arouse interest among youngsters in matters of banking, savings, and financial responsibility. 

The students didn’t only end up opening their own bank accounts but the FinLit team even heard talks of entrepreneurial aspirations among  them. Discussions of buying tools for their parents’ farm so that they could add to their family incomes and strategies for selling commodities at a profit were apparently rife when they wrapped up their program in the schools.

Thus, Thapa reiterates, “It’s never too early to start saving and manage your money.”

Unfortunately, these aren’t conversations that are commonly carried out with Nepali youths at their schools or even at their homes. Thapa says many Nepali youngsters haven’t spared a single thought about not only capitalizing on their finances but even managing it. 

As part of FinLit Nepal, Thapa has been helping carry out curriculums to engage youths and spread awareness on the matter. Here with The Week, he talks about his experiences interacting with Nepali youngsters and shares a few helpful pointers youngsters looking to handle their money better.

Calculate how much Rs 500 every week can amount to in a year. 
“Too often, we see that pocket money for the youngsters is all about spending opportunities and that’s not exactly their fault,” says Thapa, “They simply aren’t informed otherwise.”

At that age, many tend to underestimate what even Rs 500 every week can amount to in three or six month’s time. If you do it for a year, a teenager can have savings of around Rs 24,000. But in Thapa’s experience, nobody has helped bring this to many students’ attention. Thus, potato chips everyday or the purchase of a pair of new shoes is more tempting for them.

So Thapa’s first tip is to reconsider your spending habits. “We also teach them to prioritize their expenditure,” he says. Given a choice between spending their pocket money on a shoe or a book, he asks the students to consider what will prove to be more beneficial for them in the future.

Their curriculum also teaches the importance of being far-sighted about their money. If they are spending their money, Thapa explains the concept of making an investment. A book, for instance, can help you learn or perhaps even develop some skills that you can later use to generate more income.

It’s about changing your perspective on how you choose to use your money. When you factor in these components, you develop habits that are crucial for personal finance management.

Decide on how you want to go about your savings.
So, you have decided to be smart about the way you spend your money and want to try saving as well. However, saving often isn’t only about putting aside some cash.

The act of saving your money becomes easier once you break it down and develop some sort of a system. Thapa considers it very important to ask questions like: How do you want to save? Daily, weekly or monthly? What will be your target saving amount? How are you going to reach the desired amount? and so on from the get go. It’s best not to be random about these things.

Further, during their workshops, Thapa also informs the students about the different ways to save their money and how to make personal analysis of its pros and cons according to the individual’s habit.  

The choice is theirs to make. One can choose to save in their homes, banks, or even reliable cooperatives. 

Familiarize and engage yourself with the necessary institutions.
For instance, if you want to start savings in a cooperative, first and foremost, you need to know how these multipurpose cooperatives operative. Usually, here you can save Rs 100 every day and if you put in about Rs 2,500 on a monthly basis, you will get more interest. After six months of this, you can even be eligible for a certain amount of loan. This can be ideal for youngsters with entrepreneurial ambitions.

But for this, one needs to know about these services and opportunities. So where can you get these information? Where cooperatives are concerned, Thapa says it’s best to contact Rural Micro Finance Development Center and they can provide you all the necessary details, from the interest rates to the specific sectors different cooperatives are involved in. 

Similarly, if you want information about banks and such there are platforms like Nepal Banker’s Association or you could also visit the website of Nepal Rastriya Bank. Again, here you can access all the required information, from the list of banks to fraud risks.

But Thapa says sometimes the challenging part is to get an 18-year-old motivated enough to approach these places and ask these questions. Not that he hasn’t met youngsters who are interested in these matters, he talks of meeting a 19-year-old at a stocks workshop in Bhaktapur and being impressed by how well versed the youth was about it all. Nevertheless, it would help more young people if they too engaged themselves in the financial scene and familiarized themselves with the trends, processes, and the happenings.

Thapa stresses that learning how to manage your finances is a continuous process. It’s best to keep tabs of these institutions and several other economic forums so that you can get ideas, knowledge, and also the motivation to be more responsible with your finances. In a way, reaching out for more information could be your first step. You can even start a dialogue among your peers and family about it.

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