Investing in Grassroots Financial Knowledge for a Wealthier SA

The South African government recently encouraged South Africans to make smarter financial decisions by saving for the future after a Financial Literacy in South Africa survey revealed that 46% of adults focus on present financial stresses rather than their future. Furthermore, 44% aren’t actively saving, and a third have no retirement plan. 

These findings highlight the importance of financial literacy education in shaping South Africa's economic future. In today's economic climate, this education isn't just beneficial – it's essential. Empowering South Africans with the knowledge and tools to invest wisely helps individuals and contributes to the nation's financial resilience. 

Index-tracking investment product providers like Satrix can help break down the barriers to investing to make financial growth achievable for everyone, regardless of their starting point. Furthermore, making this education accessible from a young age can help promote a healthier savings culture by demystifying the investment process and making it more accessible to more South Africans. 

The State of SA’s Savings Landscape 
Recent studies paint a concerning picture of South Africa's savings and investment landscape. According to the South African Reserve Bank and Deloitte's South African Investment Management Outlook for 2023, in 2022 and 2023 respectively, the country's savings rate ranged between 0.13% and 0.5%, significantly lagging behind emerging markets like Brazil (16.9%) and India (10.8%). 

These statistics are compounded by the Financial Literacy survey findings, which further indicate that just 26% of South Africans have funds saved for rainy days, and those will last for only three months.

Promoting a Healthy Savings Culture Through Grassroots Education 
Expanding financial education at the school level is paramount in cultivating a robust investment culture in South Africa. This approach helps children understand concepts often overlooked in traditional curricula, like compound interest, debt management, and investment diversification. These practical skills empower young people to make informed decisions about their finances as they enter adulthood and the workforce.

Introducing these financial concepts during the early years helps shape responsible financial behaviours before poor habits form. For example, a 2023 study on children’s understanding of financial literacy in Malaysia reveals that children start developing money habits when they’re seven. 

Financial education experts, therefore, encourage introducing financial literacy to children at a young age to increase their awareness of the importance of managing their money wisely and lay the groundwork for them to develop the skills, knowledge, and habits they will need when facing financial challenges when they’re older.

This early intervention could be crucial in enabling South Africa to establish a solid foundation for lifelong financial well-being. South African children who learn about budgeting, saving, and investing from a young age are more likely to carry these positive habits into adulthood, potentially avoiding common financial pitfalls.

Using Technology to Drive Financial Literacy and Economic Growth 
The Malaysia study suggests digital tools could significantly enhance financial literacy by making concepts more interactive and engaging. The successful nine-week Money School TV-style virtual educational initiative Satrix sponsored for South African Grade 11 and 12 learners in 2022 and 2023 reflects this impact. 

The free virtual learning programme delivers highly relevant financial literacy content through interactive, live-streamed lessons to over 65 schools throughout South Africa. It covers essential topics such as basic financial skills, investing concepts, budgeting, saving, and managing debt. These sessions provide learners with vital financial tools needed in everyday life, equipping them to become financially knowledgeable future decision-makers. 

Investing Empowers South Africans to Improve their Financial Futures 
Although South Africa's savings and investment statistics are alarming, there’s still an opportunity for a collective effort by the financial sector, schools, government, and parents to work towards fostering financial literacy and empowering a generation of savers and investors. 

Making high-quality financial education and easy-to-use investment platforms like SatrixNOW accessible helps more South Africans take control of their financial futures and build a more financially secure, resilient, and wealthy South Africa. 

Disclaimer

_{Satrix Investments (Pty) Ltd is an approved FSP in terms of the Financial Advisory and Intermediary Services Act (FAIS). The information does not constitute advice as contemplated in FAIS. Use or rely on this information at your own risk. Consult your Financial Adviser before making an investment decision. 
Satrix Managers (RF) (Pty) Ltd (Satrix) is a registered and approved Manager in Collective Investment Schemes in Securities. 
While every effort has been made to ensure the reasonableness and accuracy of the information contained in this document (“the information”), the FSPs, their shareholders, subsidiaries, clients, agents, officers and employees do not make any representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance upon the information.}