South Africa’s government has highlighted financial education as one of the components of a comprehensive solution for empowering consumers to engage with financial services.
A 2013 financial literacy study prepared for the FSB reads , “It seems that young people in South Africa are inexperienced with regard to financial products, probably owing to their limited access to financial resources and their lack of a regular income.”
To support national efforts to educate consumers, particularly the youth as the next generation of consumers to come, Strate has partnered with the Financial Services Consumer Education Foundation to provide financial literacy to attendees of the SAICA/Thuthuka Winter camps. Over 1000 Grade 12 learners attended the camps that provided additional support in mathematics, basic accounting and life skills. Information about savings and budgeting, financial planning, rights and responsibilities, as well as financial recourse mechanisms available to consumers were among the topics presented at these workshops.
Taking into consideration that the youth of today are the economic contributors of tomorrow, the importance of educating them to be financially savvy cannot be underestimated. According to Leigh Bevis, Strate’s head of Stakeholder Relations, financial literacy empowers them to manage their finances, providing them with the tools to improve their life and financial wellbeing, as well as contribute positively to economic growth.
“It can be easy for a school learner to lose his or her way with debt and finances when leaving school. People who have a lower degree of financial literacy tend to lend more and experience difficulty with debt, which may lead them to save or invest less – ultimately accumulating less wealth for their families. Their understanding of t he terms and conditions of financial products, such as their home loans, bank accounts or credit cards, may even lead them to pay more in fees related to financial products. Giving them the understanding of budgeting, saving, the difference between how to spend money wisely rather than recklessly, as well as retirement can re-shape their lives and transform the economy’s growth,” she explains.
The FSB 2013 Financial Literacy Report revealed that South Africa has a financial literacy level of 54 out of 100. According to the 2014 second quarter PPS Professionals Confidence Index (PCI), which was conducted among approximately 3 000 of SA’s graduate professionals, a confidence level of just 38% was recorded when respondents were asked how confident they were that the general public in South Africa has a good understanding of financial matters, such as budgeting, saving, retirement and insurance.
“Financial literacy among the youth has the potential to paint a very different picture. Strate is very passionate about the upliftment of financial literacy in South Africa. It partners with key stakeholders, such as the Financial Services Consumer Education Foundation, an independent Trust, founded by the FSB in support of its Consumer Financial Education initiatives. This ensures that we can work together with the financial market to make a real difference to South Africa and improve the lives of our children, as well as our children’s children,” concludes Bevis.