A common outcome of poor financial literacy is over-indebtedness.
For illustrative purposes. Picture: iStock
Conversations about money do not often come easily. The topic can seem private and sensitive.
By avoiding these discussions, people miss out on essential information and face the risks of crippling debt, inadequate savings for the future and poor budgeting practices.
Talks about finances should be treated the same way as ‘talks’ parents have with children about the adolescent stage.
Talks about money with kids
Tina Manyanya, spokesperson at Wonga, believes it’s time to normalise money conversations and remove the stigma, ensuring South African children are at the heart of this change, cultivating a culture of open, frank and educational conversations.
“Involving younger generations in conversations about how to spend their money is key to their development,” says Manyanya.
“When they’re encouraged to discuss money, parents set a standard for strong financial habits in their children’s futures.”
Too many adults are financially illiterate
Manyanya says reports are suggesting approximately 49% of South African adults are financially illiterate. That is roughly more than 30 million people without a proper understanding of money and the methods available to protect them from financial complications.
“As the cost-of-living crisis persists, every rand counts more than ever, and these conversations have never been more relevant,” she adds.
A common outcome of poor financial literacy is over-indebtedness. “In 2024, approximately 12 million adults in South Africa were over-indebted,” she highlights.
“To safeguard children from the financial distress of debt, parents can start by highlighting the difference between a need and a want. This simple idea can enable their ability to prioritise what is key to their survival versus what is not.”
Lessons in budgeting and saving
Manyanya notes the importance of lessons on budgeting and saving as a step toward ensuring children develop a healthy relationship with their finances.
“Introducing a savings jar into the home allows their young minds to visualise the money available to them, whilst recognising that it is not infinite,” she says.
“As a parent, contributing to the savings jar can be equally as valuable to your child. Children are highly observant, and this can establish positive behaviour.”
Setting goals to spend money
Manyanya adds that once the savings jar is ready, parents can set meaningful goals with their child, bringing purpose to their efforts.
Instead of purchasing every new toy or gadget they request, there is an opportunity for a lesson in independence.
“By saving and managing their money, kids are thrown into grasping the reality of money’s true value.”
Guide to preparing your child’s financial future
Other simple and useful ways to jumpstart your child’s financial literacy:
- Turn saving into a lifelong habit: Set them up with a savings account early. Not only is this a strong reminder to protect their money, but it’s also a practical introduction to how interest rates work and how savings can grow over time.
- Teach the value behind each rand: Emphasise that money is earned and not simply given. By offering compensation for household chores, you can help your child understand the connection between work and reward.
- Make money lessons fun: Introduce them to online resources, apps and tools designed to make financial literacy lessons easy, accessible and engaging.
