Milpark | Financial Literacy: More Important Now Than Ever

What Does Financial Literacy Involve?

At its core, financial literacy is about knowing how to budget, save, invest, and manage debt. It means:

Budgeting wisely: Track your income and expenses and prioritise essential spending.
Saving regularly: Build a safety net for emergencies and future needs. A simple rule to follow is: “Save before you spend.”
Managing debt responsibly: Understand loans, credit cards, and interest rates to avoid over-indebtedness.
Investing intelligently: Grow your money over time while considering inflation. During high inflation periods, some spending may be better than saving, but inflation-protected investments like indexed bonds can safeguard your wealth.

Luckily, many accredited online courses and resources are available, making financial literacy more accessible than ever.

The South African Context

Many South Africans are under significant financial pressure due to rising living costs, unemployment, and over-reliance on credit. Over 12 million adults are estimated to be over-indebted, often because of poor financial decisions.

Creditors operate to maximize profit, and financial vulnerability can leave individuals exposed. This highlights the importance of basic mathematical literacy - being able to calculate costs, interest, and repayments before taking on financial obligations.

Do You Need a Qualification to Be Financially Literate?

While a formal qualification can deepen your understanding, financial literacy is ultimately about practical, everyday skills. Anyone can build confidence in money matters by learning how to:

How to live within your means
How to budget and save
How to manage debt
How to understand interest and inflation

Formal education in business or finance can help, but anyone can achieve financial literacy by learning and applying these basic principles. Living within your means, spending wisely, and saving consistently can reduce financial stress and give you greater control over your life.

When Is Debt Appropriate?

Debt isn’t always bad. Sometimes, borrowing is necessary for major expenses, such as buying a home, a car, funding higher education, or starting a business. In these cases, debt can be a tool to improve your financial situation.

For example, a student loan may be essential if your child wants to pursue tertiary education and funds aren’t immediately available. The key is to use debt strategically, not impulsively.

When Should Financial Literacy Education Start?

Financial literacy should start as early as possible. Early education builds good habits, prepares one to make sound decisions, and opens the door to more advanced skills, like investing, retirement planning, and navigating financial markets. Career days and practical learning experiences in schools can play a vital role in this development.

Final Thoughts

Knowledge is power, and financial literacy is your passport to a secure future. By equipping yourself - and your children - with essential money skills like budgeting, saving, and investing, you can avoid financial pitfalls, make informed choices, and take control of your financial wellbeing.

If you want to strengthen your knowledge, consider enrolling in a financial literacy course. These courses provide structured learning, practical tools, and real-world strategies to help you manage your money more effectively. Take the first step today—register for a financial literacy course and invest in your financial future.

Financial Literacy: More Important Now Than Ever