"Too many people are spending more than they actually earn, while continuing to rely on credit to make ends meet," says Laurence Hillman, MD of 1Life. "There is an intrinsic link between this kind of behaviour and having money sense. Not only does financial illiteracy impact on the individual's day-to-day money management, but it also impacts their ability to save for long-term goals and reach financial independence at retirement age. People who make a deliberate effort to equip themselves with an education in personal finance have an advantage over others in life, as they have the ability to dictate the way they live and build wealth."
Empowering people
Financial literacy programmes can also contribute to social cohesion, by supporting the improvement of a community's well-being. In fact, these kinds of programmes are especially important in a country such as South Africa, where there is a vast disproportion between rich and poor communities.
Hillman says in the last two years Finance Minister Pravin Gordhan has stressed the need to raise the levels of basic financial literacy amongst all South Africans. "While government has an important part to play, there needs to be a combined effort from corporate SA too. Financial literacy, however, cannot be acquired immediately, but rather is something that needs to be learnt over time and once achieved, can empower people to take control of their finances by making more informed decisions that can be life changing both personally and for SA as a whole."
