If you find finance news uninteresting because it looks like a sea of boring numbers, making you skim through it without understanding a thing, but you still can’t help but think…
“What do these numbers even mean!?”
I was like that, too, until I learned what I’m about to share with you. After this post, you will not only understand the news, you might even look forward to the next update in the financial market.
Why Do You Need to Read and Understand the Finance News?
Look at this short story before we continue:
Adeife has ₦200,000 in her savings account. She leaves it there for a year, thinking she’s “keeping it safe.”
- The inflation rate is 20%.
- Her bank interest is 5%.
At the end of the year, her account shows ₦210,000 (₦200k + 5% interest).
She’s happy and goes shopping.
What ₦200,000 could buy her last year now costs ₦240,000 because of 20% inflation. So, even with her ₦210,000, she can only buy about 87% of what she could have bought a year ago. Her purchasing power has dropped.
She thought she ‘saved,’ but in reality, her money lost value.
If Adeife understood the finance news, she would’ve realized that her interest rate was lower than inflation. To protect her money, she would have needed to explore inflation-beating options, such as mutual funds, treasury bills, or bulk-buying groceries. This is financial literacy.
So, How Do You Understand the News?
- Three things – Numbers. Stories. Impact
The finance news is really about numbers, stories, and impact. When you see the numbers, it tells you what’s happening in measurable terms. The stories explain why those numbers moved up or down. And the impact answers the only real question you care about: “How does this affect the economy, my money, and my future?”
For example:
Headline: Nigeria’s inflation hits 20% in September.
The Numbers: Inflation is 20%. That means the average price of goods and services is 20% higher than last year.
The Story (why it happened): This spike is tied to fuel subsidy removal, weaker naira, and higher transport and food costs.
The Impact (how it affects you): Your ₦10,000 grocery budget now buys significantly less food than it did a year ago.
- Understand the Basics
Start by focusing on the basics. Don’t get lost in the jargon. Translate every term into something practical.
Inflation means Prices are rising.
When you hear Interest rates, think, borrowing is cheaper or more expensive, then GDP is how much the country is producing.
If the stock market is low, you might decide that this is a good time to invest, because you will get more for your money.
- Take Only What Matters
Filter for what applies to you. If you’re an investor, you’ll focus on company earnings, interest rates, and stock market news. If you’re just managing household finances, inflation, fuel prices, and government policies may matter more. The trick is not to understand everything, but to understand the few things that shape your own financial decisions.
- You Need An Extra Dose of Patience
If you come across an unfamiliar term, in the spirit of learning, look it up. Go through every sentence carefully and make sure you truly understand what’s being said. Summon that deep comprehension skill your primary school teacher tried so hard to teach you. The more terms you understand, the easier it gets.
Common Financial Terms You May See
- Inflation at 20% – Prices of goods and services are rising fast. Your ₦100 today buys what ₦80 bought a year ago. Inflation can be reported as Year-on-Year (YoY), which compares prices to the same month last year, or Month-on-Month (MoM), which compares to the previous month. If not specified, it’s usually safe to assume the report is YoY.
- Central Bank raises interest rates – Borrowing money (loans, mortgages, business capital) becomes more expensive. But savers may earn a little more on deposits.
- Stock market rises 3% – This usually means companies are performing well, or the economy looks healthier. If you have shares, their value likely went up.
- Naira depreciates against the dollar – Import costs rise (phones, clothes, fuel). It also means travel and studying abroad become more expensive.
- GDP growth slows – The economy isn’t producing as much. Businesses may cut jobs or slow expansion. This can mean fewer opportunities and higher unemployment.
Take Beginner Steps
As you read the news, train yourself to ask these key questions:
Question 1: What happened?
The same way you ask your friend when you want to hear ‘gist,’ ask open-heartedly and strip away the complex language you may come across, translating the headline into simple, plain ‘gist’.
Question 2: Why did it happen?
Don’t just read what happened; ask why it happened. For instance, if fuel prices rise, is it because of global oil prices, local subsidy removal, or currency weakness?
Question 3: Who are the winners and losers?
Every financial story has both. When interest rates rise, borrowers lose but savers may gain. When naira weakens, importers lose but exporters gain. Always ask: “Who benefits, who suffers?”
Question 4: What’s the short-term impact on me?
Does this change my daily spending, savings, or lifestyle immediately?
Question 5: What’s the long-term impact on me?
Is this a trend or just temporary? Will it affect my career, investments, or cost of living over time?
Question 6: Action check.
Decide if you need to do anything or just note it.
P.S. Financial news is often written either to calm or to alarm. Government statements may downplay problems, while media headlines might exaggerate them. Always be skeptical and compare multiple sources.
As you keep learning, it gets easier. So when you don’t understand a term, don’t just skip it. You don’t have to be a financial expert to understand it.
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