Financial literacy crucial skill for South African youth

This as at a time when the world economy is struggling with the arrival of COVID-19, bringing depression across world economies.

Financial literacy is a crucial skill in every stage of life, more so for young people today.

This as at a time when the world economy is struggling with the arrival of COVID-19, bringing depression across world economies.

It is no secret that South Africa is battling the three challenges of unemployment, inequality and poverty.

Despite the myriad challenges faced by the country, the perseverance of young people against many challenges, including academic exclusion, has led many to start their own innovative businesses while others have gone into their dream jobs.

While South African youth continue to break barriers and go into fields that our grandparents could only dream of, it is equally important to have a healthy relationship with money.

The proper management of debt, while also ensuring savings, is a skill that many people are still battling to master at a time when the pandemic is likely to lead to further job losses.

However, as young South Africans, we cannot allow this to be the last page of the story.

Our government has worked hard to create the right environment for investment and economic growth.

While no one knows how world economies will emerge at the conclusion of the pandemic, the government has demonstrated that it cares for its people, with the payment of grants continuing over the period of the COVID-19 lockdown.

Recently, President Ramaphosa announced a special COVID-19 Social Relief of Distress grant of R350 a month, for a period of six months to individuals who are currently unemployed and do not receive any other form of a social grant or Unemployment Insurance Fund payment. 

Among others, young people can use this special grant to buy seed for a backyard vegetable garden and sell this vegetable to their local communities.

This will generate income, which can be used to purchase essentials, while also saving for a rainy day.

The grant can also be used as capital to buy hair clippers to start a small barbershop which one day can grow to become an empire employing many.

While many dreams of lavish lifestyles, coupled with fancy cars and homes seen across various social media platforms, young people have to take into account the need to live within one’s means.

It becomes unfortunate when young people use credit unwisely, leading many to become blacklisted.

As young people, we have to understand that credit, when used correctly, can be used to start a business or to purchase a home.

The consequences of not learning to manage and understand basic financial concepts can severely affect the quality of one’s life. At worst, it can lead to bankruptcy and unfulfilled life goals.

However as we commemorate the 44th anniversary of Youth Day, parents can play a role in getting their children to start saving part of their allowance, no matter how small, at a young age.

As a young person, I urge young people to learn basic financial principles and cultivate the habit of weighing the pros and cons before making a financial commitment.

This Youth Month, I urge you to learn the language of money so as to become financially independent. Your future self will thank you for it.

*Moshe Makola, an intern at Government Communication and Information System (GCIS), wrote this article.

(With Inputs from South African Government Press Release)