Over half of South Africans make less than R10 000 each month.
Keeping a roof over their heads and providing food for their families takes up the majority of their monthly salary.
About 39% of those who drop out of school cite financial concerns as the main cause, which has a direct impact on their chances of leading a better life and achieving financial goals which results in the cycle of poverty repeating itself.
South Africans have a strong desire to work towards a better financial future, but a lack of opportunity, ongoing economic challenges, and a lack of financial literacy threaten to derail their efforts, according to Wonga CEO, Brett van Aswegen.
Providing insight into financial literacy may abate the economic challenges faced by many South Africans, says van Aswegen.
A lack of financial literacy may result in more unsustainable debt burdens, poor credit, money loss, and an increased risk of becoming a victim of fraud, threatening your long-term financial success and limiting your ability to live life on your terms.
The reality of the country’s economic challenges are also clear, the need for people to use the majority of their income just to survive on a day-to-day basis means that their long-term financial well-being is negatively impacted
This is worrying, as it means people are in increasing danger of paying excess interest on loans or even defaulting on payments,” Van Aswegen says.
South Africans have indicated that they would like to adopt healthier financial habits, but they are unable to as a result of financial constraints. However, adopting a few financial tricks may help you manage your finances.
How to improve your financial literacy skills
There are many skills that contribute to financial literacy, and the ability to master them determines how informed and appropriate your financial decisions are.
Understand how to budget
Know how much you earn after taxes, determine your primary expenses, and keep track of how much you spend on non-essentials.
This will show you where your money is going, what you can cut back on, and how you can better allocate funds to savings, an emergency fund, and retirement.
Manage your money and pay off debts
Know the basics of credit and investment products and how to use them and contribute to an emergency fund and planning for retirement.
Van Aswegen believes that when financial constraints limit an individual's ability to pursue their dreams, it threatens to harm their long-term financial well-being and frequently leads to dissatisfaction.