Johannesburg- Poor financial literacy continues to hamper South Africans’ ability to save. A 2017 report by the Human Sciences Research Council (HSRC) found that 48% of South Africans don’t save at all, with 42% reporting no long-term savings of any kind.
A 2021 Deloitte research further shows that nearly 70% of South Africans were spending all their income – or more income than they earned – every month.
Farzana Botha, a segment solutions manager at Sanlam Savings, said there are significant gaps in understanding basic financial concepts and that this means that a one-size-fits-all approach to financial education is unlikely to
deliver results.
“While access to financial infrastructure is one way to broaden socio-economic inclusion, another is addressing the knowledge gap in ways that actually work,” she said.
“This needs to be a nuanced approach that’s sensitive, sustainable, and accessible. It needs to empower people to live with confidence, go after their goals and believe they can build a better life. Ideally, it should start in childhood, but be an ongoing journey.”
Botha said to upskill yourself in financial education, you should:
- Get a grip on your personal finances. Understand the current state of your financial position by assessing your income, expenses and knowing how much debt you have and what you are paying to service that debt.
- Take personal responsibility for upskilling yourself on the basic principles of finances. This includes self-reading, research and asking questions.
- Speak to professionals. This includes professionals in taxes, estate planning and financial planning that can offer insurance solutions that meet various needs and shortfalls.
“Self-education is the first step. Then it’s imperative to share knowledge with others – especially children. From as early as childhood or adolescence, learning to manage money is a vital life skill. Games like monopoly may help to teach children to manage cash flow and debt, as well as the financial consequences of certain actions. Earning money through chores and learning to budget are good ways to start teaching children to manage money. Opening a bank account as soon as possible can also help teach children about interest rates and inflation,” said Botha.
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