Financial Education: Between immediate desire and smart spending
Talking about this topic is always relevant because everything around us revolves around finances. Almost everything requires money to eat, travel and dress.
Where there are so many options for using/spending money, the first rule is to prioritize the most basic needs and only then the “wants”. That’s why it’s essential to say that financial education is crucial in this regard.
One of the first questions you should ask yourself is what my short-, medium- and long-term goals are, or what my personal and/or family goals are.
In other words, you need to draw up a plan. According to accountant Adilson Vaz, the reference he makes to the cartoon “Alice in Wonderland” with regard to the famous phrase: “if you don’t know where you’re going, then any path will do” is applicable to finance.
In fact, the same thing happens when you don’t know for sure, at least when you don’t have a plan, what you want to do with the money.
“Smart spending” is the ideal expression, according to Vaz, to describe those who are financially literate and who want to use their money well by means of a spending limit known as a “budget”. This is what allows anyone to have an early view of their spending.
Another important tip is that income should always be higher than expenditure. The rule is to spend less than you earn. And with that, it’s easy to make savings, the ideal being to always save at the beginning of the month rather than at the end of the month. It should also be noted that savings can either be used for “investment savings” or for “emergency savings”.
Asked about the financial education of Cape Verdeans, Adilson Vaz replied that they could be much better off.
Although there is a lot of information on this subject, culturally speaking Cape Verdeans like to spend their time “here, now”. So they still need to learn how to plan better through good financial education, he adds.
At the end of the interview, Vaz also said that the “Achilles heel” of Cape Verdeans has been debt. Going into debt to satisfy desires, working, paying off debts and going into debt again has made it difficult for many people to adopt a different way of managing their finances.
In general terms, Cape Verdean society will be able to have a good financial education when schools and families teach these values and principles from an early age. Therefore, Adilson Vaz, as an accountant, says that what can happen from an early age, in the case of schools for example, is to revise the school curriculum to include teaching about financial education.
Decisions of this kind are the basis for building an entrepreneurial country. A country of resilience, opportunities and not just obstacles,” he concludes.
