Do you know how to get the most value out of your banking? Are you savvy in the way you save? Do you know how to reduce debt and increase your credit score? Do you understand basic investment principles? Do you know how to use your money to get the greatest tax benefits possible?
If your answer to any of the above is ‘no’, you could be among the numerous South Africans in need of financial literacy education. The effects of poor financial literacy can be devastating on your financial future, right through to retirement, where it is estimated that only 6 out of every 100 individuals will be able to retire comfortably.
According to Kantar research, most South Africans want to save, but they simply don’t understand the various options available to them, from traditional bank savings accounts to new platforms like cryptocurrency. As a result, the average consumer now spends more than 75% of their take-home pay on debt; and eight out of every 10 of us can’t make ends meet every month.
Financial literacy affects every aspect of our lives, from education on where to live and how we access medical care. The less debt we have, the less stressed and heathier we are. Even just taking a few minutes every day to educate ourselves better about financial matters is an investment in our futures.
A survey by DebtSafe in June saw 80% of respondents saying they struggle to save because they don’t have enough money to cover their living expenses, and many are mired in debt.
A third of respondents said a lack of finance knowledge is the main reason they struggle to budget. Around 80% of people run out of money within five days of being paid – and because they don’t know any better, they turn to payday lenders, personal loans and unscrupulous lenders to get them through the month.
One solution to the problem of low financial literacy lies in app-based financial learning experiences. These apps give users the knowledge to understand financial matters through easy to grasp, story-driven educational content that is delivered to their mobile phones, wherever they are.
- Chidrawi is head of retirement at employee benefits advisory firm NMG Benefits.
For more business news from Sunday World, click here.
Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here
