Bringing up children in Nigeria, as with any country of the world, is a full-time job. You need to prepare in advance before contemplating starting a family, because once they start growing, there will never be any opportunity to plan adequately for them. The rate at which children are being left to roam the streets, begging for daily bread or hawking has become a huge cause for concern, because they form a part of the vulnerable population.
According to a 2014 UNICEF report, children under 15 years of age account for about 45% of Nigeria’s population. This figure translates to 84,000,000 children under that age bracket. 40% of children under the age of 6-11 do not attend any primary school, with the Northern states in Nigeria being among the worst hit.
It is estimated that about 4.7 million children of primary school age are not enrolled in schools and have been abandoned to fend for themselves on the streets.
The above statistics are a stark reality that should act as a caution to any couple planning to start a family. There are obviously certain financial indicators that must be ticked before the decision to raise children can be approved and implemented.
You must have a stable career
The need to have a stable career before raising kids cannot be overemphasized. If your present job is not able to take care of you and your partner, it is not wise to even think of having kids.
The minimum wage in Nigeria is presently fixed at N18, 000 and when other monthly allowances are added, the average monthly take-home of a Nigerian worker amounts to between N50, 000 and N60, 000. This no doubt cannot take care of raising kids amidst other basic expenses. Therefore, think first about getting improved stable wages before going ahead to have children.
It is foolish for some newly employed staff to contemplate starting families. Female staff in some Nigerian banks, for example, are required to sign caveats on raising kids when they are newly employed. With at least a year upwards before employment confirmation, they must think carefully before conceiving, because they could veer off their career paths due to the disruptive nature of attending ante natal sessions and going on maternity leave.
Have enough disposable income
A disposable income is basically the amount left unattached to any planned expense after all essential expenses like taxes, shelter and clothing have been taken care of. Disposable incomes usually form less than 20% of monthly income and they vary periodically depending on exigencies and flexible expenditures occurring monthly.
If your disposable income cannot cater for the basic needs of a child like healthcare, feeding and clothing, then it is not worth contemplating raising a family.
Have emergency funds available
Emergency funds or savings are like the cushion one falls back on, when an unplanned event occurs. As a mum, I have had numerous experiences where emergency funds rescued me when my kids fell ill suddenly.
The amount set aside for emergency funds depends on the number of kids one has. Per kid, it is ideal to keep a minimum of N10, 000 as an emergency fund. If this cannot be possible, then discard the thought of raising kids.
Contribute to your retirement account
The new pension act stipulates compulsory deduction from workers monthly salary in a contributory pension scheme. The employer contributes about 8% of total package, while the worker contributes about 10%.
These retirement funds, usually called RSA funds, are usually accessible when one retires from paid employment and can be useful for those whose retirement periods coincide with when the kids are in universities.
Be in a position to save for university
It is important to start saving for your children’s education right from when they are born. Anyone who is planning to start a family must be able to open children’s educational accounts for their kids. These accounts are good sources of funding for university tuition, when the kids grow up.
It is important that one should be able to calculate the basic requirement for opening such educational accounts and if possible, drop a mandate for monthly deductions from your salary account to the educational accounts to keep them active.
In summary, it is essential that the total cost involved in raising children is considered, before giving birth.
For starters, the average monthly cost for taking care of a child less than 2 years of age, is on average about N10, 000 and this excludes emergency medical care for the child. This translates to around N20,000 plus monthly. This is the minimum average required, as location may also play a role in this regard.
Couples living in Abuja may end up requiring more funds to cater for the upkeep of their children compared to couples living in Benue state, because of the standard of living and the basic cost of food items in both states.
These should be factored into the decision making process, before a final agreement is reached between both partners on their desires to raise children.
Want to be like Warren Buffet, Michael Phelps? Here are their secrets
The distinctiveness among Buffet, Dangote, Ovia, Phelps, Bolt, Musk, is not what they do, but how they do it and how often they do it.
Michael Phelps won 22 Olympic medals (18 gold), how did he do it? Well, he trained and trained and trained, then he ate and ate and ate every day. He was also blessed with natural attributes i.e., he was tall.
So, wait, if I am tall and eat, and train, I can also win 18 gold medals? No! but stay with me.
Warren Buffet likes to invest. He reads research reports, likes numbers and is always looking a discount deal on great stocks. Ok. So, if I am good with numbers, research buy great stocks I will become as rich as Warren Buffet? Well, maybe not as rich but you will earn more from your investments. The distinctiveness among Phelps, Bolt, Buffet, Musk, Dangote, and Ovia, is not what they do, but how they do it and how often they do it.
Let’s look at an Olympic swimmer like Michael Phelps. When Michael was eight, he wrote out his goals; he wrote, “I would like to make the Olympics,” then listed his time goals for the various races i.e. breaststroke, freestyle etc. At the age of eight, this future Olympian had visualized his goals, written them down, and put a date for accomplishing them.
When seeking to create a financial plan, it is impossible to achieve success without visualizing out a goal on paper. Imagine creating an investment plan without any idea of a retirement date or income or rates of return. It’s impossible without a clear road map to determine how much to save and invest for five years. During his teenage years, he trained “every single day, 365 days a year, Sundays, Christmas and Thanksgiving days included… and twice on his birthdays,” says his coach, Bob Bowman.
If an investor saved N1.00 every day for 5 years at 0%, that saver would have N1,826.00 What if those savings increased to N5.00 and were invested at just 5% annually? Then the savings pot will become N10,373.04. Yes, inflation will erode the value after 5 years, but applying a 13% inflation rate, the saver still has a real saving of N5,170.14.
So, the second lesson we take from Olympic champions is to start early, save, and then invest constantly. Micheal Phelps is a swimmer, a sport for endurance and speed. What do endurance athletes like swimmers and marathon runners eat? Food rich in carbohydrates; they need the carbs to fuel the massive amount of energy they expend during their sports. Phelps, for instance, for breakfast eats as many as 12,000 calories prior to his races. His breakfast consists of “three fried-egg sandwiches, three chocolate chip pancakes, a five-egg omelette, three sugar-coated slices of French toast, and a bowl of grits.”
What does a sprinter like Bolt eat? Not calories but lean protein, eggs, meat, fish, dairy. Protein allows muscles to recover and develop after sprinting, which causes minute damages to muscle fibres that can be easily converted to energy. So, two different Olympic champions, each multiple gold medal winners, but because of their different sports, they eat very differently to achieve a different objective.
Similarly, in investing, each investor is different, bond investors have instruments that have 30-year durations as opposed to stock traders who may be looking to buy and flip a stock in hours. What is key is to invest according to a stated objective and risk profile.
Where the investor has a longer endurance factor to risk, meaning the investor can accommodate volatility in his earning, that investor will be comfortable investing on equities. Equities are higher-risk investments and can lose all invested capital but can also gain 100%.
However, where the investor has a lower risk endurance, then the investor will fill his plate with lean risk asset classes like sovereign bonds which offer lower volatility to stock and deliver a fixed return, but suffer if interest rates rise.
Thus, our third lesson from the Olympians, the food each investor eats, is a function of his individual sport. Where the investors have lower risk, his asset allocation diet is different. Each investor must tailor his asset allocation to his objectives and investment goals.
Proxy Voting: Making Your Voice Heard Inspite of COVID-19
Proxy voting is a process where one person chooses another to represent him or her in casting a vote on his or her behalf.
One of the privileges of owning shares in a company is the ability to attend the shareholders’ meetings and vote on important issues about the company. In most cases, such issues touch on dividend declaration, election and/or reelection of directors, authorization to fix independent auditors’ remunerations, and the election of members of the audit committee, among others.
It has been observed that shareholders love to attend such annual general meetings in person for the pride of place it provides, as well as the social status it bequeaths to the attendees in addition to the souvenirs they receive during such meetings.
Unfortunately, that era of a social event involving the physical gathering of shareholders seems to be going extinct, thanks to COVID-19. However, in spite of the devastating effects of COVID-19, and the changes it is bringing to our social life, shareholders can still make their voices heard during non-physical shareholders’ or annual general meetings. This they can do using proxy votes.
What is Proxy Voting: Proxy voting is a process where one person chooses another to represent him or her in casting a vote on his or her behalf. Proxy voting has not been more important than in the present COVID-19 times. In reaction to the pandemic, proxy voting is being used in areas outside corporate governance. For example, the US House of Representatives is pushing for proxy voting as a means of getting things done in the house. In a proposal released by the House Speaker, Nancy Pelosi, US lawmakers would be allowed to cast votes for their colleagues who are not in the Capitol in person. That underscores the advantage and the increasing importance of proxy voting.
Nigerian Companies and Proxy Votes: Proxy voting is not new in Nigeria, especially among Nigerian companies. Whether it has been effectively used or taken advantage of is another question. However, Nigeria’s Corporate Affairs Commission (CAC) has been proactive and forthright in its quest to ensure that companies in Nigeria and Nigerian shareholders alike, take advantage of the proxy voting process in keeping with the social distancing rules put in place by various governments to curb the menacing COVID-19. The CAC has therefore asked companies to take advantage of “S.230 CAMA on the use of proxies in holding their Annual General Meetings.”
In line with the availability of the proxy voting process as a way to give every shareholder a voice and the encouragement and enablement from the CAC, many companies in Nigeria are complying with the advice. A visit to the website of the Nigeria Stock Exchange indicates that all the 30 companies that notified the public about their annual general meetings via the Nigeria Stock Exchange, since April 1, 2020, included notices or indications of the need for proxy votes in such notifications. Many of them even included links to live-stream the events, for those who would like to participate online.
Brace for Change: There is no doubt that COVID-19 has changed and will continue to change the way certain things are done. From the look of things, proxy voting may become the new normal in corporate governance and conduct of shareholders Annual General Meetings.
Shareholders, big and small, should start getting used to voting by proxy, especially those who have not been doing so in the past. It is only by so doing that you will make your voice heard, in the affairs of the company in which you have worked so hard to invest in.
COVID-19 reveals that many Nigerians have no emergency savings
The playout of events following the lockdowns resulting from the ongoing COVID 19 pandemic shows that Nigerians do not have emergency savings
Though we are still grappling with the effects of COVID-19, it may not be too early to begin to take stock and find out what we did well during the pandemic and what we should have done better.
Almost everyone’s radar has been on the ill-preparedness or lack of appropriate response by the government, with little or no time for an inward look at ourselves.
The type of government we have in Nigeria should not have left anyone surprised at their response to the pandemic, especially when it came to the welfare of the populace. What do you expect from a government that is dysfunctional, at best?
With such government, it is time for Nigerians to begin to watch out for themselves and prepare for the unforeseen, like the times we are in currently. The playout of events following the lockdowns caused by the ongoing COVID-19 pandemic shows that Nigerians do not have emergency savings.
According to a recent publication from one of the national dailies, “Barely one month of a lockdown of Abuja, Lagos and Ogun state, millions of Nigerians had become stricken with hunger. Many could not bear an extension of the movement restrictions.” The ensuing protests were indicative of the fact that many Nigerians were living off their daily incomes with no savings to fall back on.
High Poverty Level
Many may have asked how they could save without having funds, to begin with. Agreed, the level of poverty is high in Nigeria; however, people should know that having savings is not a luxury, but a necessity. It does not have to be large, but putting aside something, no matter how small on a regular basis goes a long way in times of emergency.
I have seen images of Nigerians who surprised themselves and others with how much they saved over time in their piggy banks. There is no hard and fast rule of how much one should have in emergency funds, but there seems to be an agreement among financial analysts and planners that having the equivalent of 6 months’ expenses in your emergency savings account is the ideal.
The author of the book “Richest Man in Babylon” stated it clearly that if you do not save, it means that you have paid everyone else but yourself.
How to Start Saving
Pay yourself first: In line with the instructions in “The Richest Man in Babylon,” when you receive your monthly salary or collect that sales proceed from your business, “pay yourself first” by saving at least 10% of your collections or salary. For the salary earner, set up a direct deposit account where the money would be taken out of your pay directly into a bank savings account. By so doing, you are forced to save.
Cultivate the savings habit: Just as spontaneous buying is a habit, form the habit of saving. Do not see saving as putting aside the remnants (if any) after all your expenses. If that is your attitude to savings, then you fall into the group that pays everyone else but themselves.
One thing is certain; as long as you have the money, there will always be something that is going to demand that money from you.
Remind yourself to save: If you are a salary earner who does not want to set up a direct deposit from your paycheck or you are a businessman or woman of any means, you can set up a savings reminder around the time you receive your salary or around your peak business time.
One website that can help you with this is here. With this, you can send an email to yourself to be delivered around the time you expect to receive your pay or business income, reminding yourself to save. Just like you set an alarm on your mobile phone, you can do so with a reminder to save.
Start Small ASAP: The Bible says that if you are not faithful with small things, how can you be faithful with larger things. You do not need millions to start saving, all you need is the will, the determination, and consistency. So, start small and start now, but be consistent.
Reduce your Expenses: As already noted, one of the reasons that people do not save is because their expenses keep increasing, even when income sources are shrinking. If you find yourself in that situation (and you surely will, at one point or the other), cut down on your expenses and make them fall in line with trends in your income. Avoid spontaneous, emotional and flamboyant buying. Buy out of need, not out of want.
Why It Seems Difficult to Save: To a whole lot of people, it is difficult to save because they live in the now. This is what financial psychologists call scarcity of attention. This scarcity of attention stops people from seeing what is really important and makes them see the urgent current expenses they need to cover.
One reason why it is difficult to save is that while the expenses keep rising (out of increased need and inflation), sources of income keep shrinking or stagnating. The good thing however, is that we have the option to shrink our expenses in line with shrinkages in our income, but often times, we do not choose to do that. That is where the inability to save starts from.
Conclusion: If there is any lesson, we learned from the sudden outbreak of COVID-19, it is and should be that emergencies happen, and efforts should be made to cushion the financial impact of such emergencies by preparing for them in advance through emergency savings.
Written by Uchenna Ndimele email@example.com