Home Economics / Home Management · Lesson 14

Entrepreneurship, money management, budgeting, saving, investment, insurance and pricing

JAMBWAECNECO

What the syllabus asks

JAMB: Wealth Creation and Management (creativity and entrepreneurship: meaning, importance, relationship, entrepreneurial skills: creativity, management, communication; entrepreneurial activities: fashion designing, hairdressing, fast foods, bead making; money management: meaning, guidelines, processes, family budget: income, expenditure, steps; wealth creation: meaning, types, advantages, ways e.g.…

WAEC: Wealth Creation and Management (creativity and entrepreneurship: meaning, importance, relationship, entrepreneurial skills: creativity, management, communication; entrepreneurial activities: fashion designing, hairdressing, fast foods, bead making; money management: meaning, guidelines, processes, family budget: income, expenditure, steps; wealth creation: meaning, types, advantages, ways e.g.…

NECO: Wealth Creation and Management (creativity and entrepreneurship: meaning, importance, relationship, entrepreneurial skills: creativity, management, communication; entrepreneurial activities: fashion designing, hairdressing, fast foods, bead making; money management: meaning, guidelines, processes, family budget: income, expenditure, steps; wealth creation: meaning, types, advantages, ways e.g.…

What you will learn

Explain creativity, entrepreneurship and their relationship.
Describe entrepreneurial skills and Home Economics enterprises.
Outline steps to start and manage a small business.
Explain money management and sources of income.
Prepare and balance a family budget.
Describe ways of saving, credit and interest.
Explain wealth creation and capital market investment.
Price products and calculate profit and break-even.

Key points

Creativity plus entrepreneurship creates enterprises and jobs.
Entrepreneur qualities: creative, risk-taking, hard-working, honest, organised.
Home Economics enterprises: fashion, hair, catering, beads, baking, laundry.
Start-up: opportunity, survey, plan, capital, CAC registration, operate, evaluate.
Work ethics build reputation.
Money management: plan, organise, implement, evaluate.
Budget: income, fixed and variable expenses, savings; review monthly.
Saving and credit: compare interest and total cost; avoid Ponzi schemes.
Wealth: financial, physical, human, social.
Capital market: SEC, NGX, shares, bonds, T-bills, mutual funds.
Insurance and pensions protect wealth.
Price = cost + mark-up; break-even = FC ÷ (P − VC).

Start here: Creativity and entrepreneurship

Creativity is the ability to produce new and useful ideas, or to find new ways of doing things. Entrepreneurship is the process of identifying an opportunity, organising resources and taking calculated risks to start and run a business for profit. An entrepreneur is the person who does this; an enterprise is the business itself.

Importance of entrepreneurship

Creates jobs for the entrepreneur and others, reducing unemployment.
Provides income and financial independence.
Develops local resources and skills (adire, local snacks, fashion).
Supplies goods and services the community needs.
Encourages innovation and national economic growth.
Reduces dependence on imports.

Relationship between creativity and entrepreneurship

Creativity generates ideas; entrepreneurship turns ideas into businesses. A creative student who invents a new zobo flavour is only an entrepreneur when she produces, packages, prices and sells it. Every successful enterprise needs continuing creativity to improve products and respond to competitors and customers.

Characteristics of an entrepreneur

Creativity and innovation.
Willingness to take calculated risks.
Hard work, determination and perseverance.
Self-confidence and independence.
Good human relations and communication.
Honesty and integrity.
Ability to plan, organise and manage resources.
Ability to learn from failure.
Good financial discipline and record keeping.

Advantages and disadvantages of being an entrepreneur

Advantages: independence; profit and income potential; personal satisfaction; flexible time; job creation. Disadvantages: risk of loss; irregular income at first; long hours; responsibility for everything; difficulty obtaining capital; stress.

Entrepreneurship in Home Economics

Home Economics skills translate directly into enterprises: fashion design and tailoring, hairdressing and barbing, catering and fast foods, baking and confectionery, event planning and decoration, interior decoration, bead-making and jewellery, laundry and dry-cleaning, day-care centres, soap and detergent making, and food processing (garri, chin-chin, plantain chips, yoghurt).

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Practice questions

1. Under the Pension Reform Act 2014, the minimum employee contribution is

8%
10%
18%
2.5%

Show answer

A: 8%
The employer pays at least 10%.

2. An employee earning ₦200,000 has a minimum monthly total pension contribution of

₦16,000
₦20,000
₦18,000
₦36,000

Show answer

D: ₦36,000
18% of emoluments.

3. Pension contributions are paid into a

fixed deposit
cooperative account
Retirement Savings Account
current account

Show answer

C: Retirement Savings Account
Managed by a PFA, regulated by PenCom.

4. Nigerian treasury bills are issued in tenors of

7, 14 and 21 days
91, 182 and 364 days
30, 60 and 90 days
1, 5 and 10 years

Show answer

B: 91, 182 and 364 days
Sold at a discount.

5. Treasury bills are sold

at a discount and redeemed at face value
at a premium
with monthly coupons
only to banks

Show answer

A: at a discount and redeemed at face value
The gain is the discount.

Key words

Creativity: Ability to produce new useful ideas.
Entrepreneur: Person who starts and runs a business, taking risks.
Enterprise: A business undertaking.
Work ethics: Moral principles guiding work.
Money income: Income received as money.
Real income: Goods and services available, including non-money.
Budget: Plan for spending and saving.
Fixed expense: Regular unchanging expense such as rent.
Variable expense: Expense that changes, such as food.
Esusu/ajo/adashe: Traditional rotating savings.
Compound interest: Interest on principal plus earlier interest.
Wealth: Assets minus debts.

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