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Monday, July 22, 2024

Real-world financial literacy boosts matriculants into the world of work

South Africa has one of the worst savings rates in the world and this is not only a problem at a household level, it is also symptomatic of a deeper issue: poor personal saving habits impact the economy at large. On the most basic level, savings translate into investment spending, and this in turn translates into economic growth. The current national savings rate of 16.3% corresponds with an investment rate of about 18%, which will fund economic growth of just 2%.

Speaking during National Savings Month, Centennial Schools Deputy Principal Joseina Ramgareeb says that the importance of saving should be taught at school-level. “At Centennial Schools, we aim to release work-ready matriculants into the economy. We teach entrepreneurship, cryptocurrencies and blockchain, coding, and other real-world skills incorporating financial education into our curriculum. This is crucial for preparing our students for the challenges of adulthood and the responsibilities of contributing to the economy.”

Ramgareeb notes that starting an entrepreneurial venture – a lifeline for many young South Africans in the context of the prevailing unemployment – requires capital. “Poor saving behaviour impacts on people’s ability to start their own businesses. Teaching children to start saving from an early age could fast-track their entrepreneurship journey later in life.”

A good credit history is another must-have for potential entrepreneurs. “To succeed as a self-starter, you will need a solid credit history, but having a credit card – which can be risky if you are a ‘splurger’ rather than a saver – is not the only way to build a credit history. You can build a credit score by having a cellphone contract, store card, or student loan in your name – and ensuring that you make these payments in full and on time, every month,” says Ramgareeb.

Ramgareeb’s savings tips for teens and young people, who earn an income or receive an allowance, include:

  1. Start somewhere: Use a budgeting app to allocate your income, track your spending, and figure out how much you can save every month, even if you start small.
  2. Find a ‘money buddy’: Partner with a friend to keep each other accountable for financial goals. Share progress and motivate each other.
  3. Open a savings account: Start saving a portion of any income you receive to build a financial cushion for the future. Set up automatic transfers to your savings account to build a consistent saving habit.
  4. Distinguish wants from needs: Understand the difference between essential needs and non-essential wants, to make better spending decisions.
  5. Shop around: Compare prices at different merchants, and avoid impulse buying by planning your purchases.

“Centennial Schools is committed to providing students with the skills needed to navigate the financial landscape of tomorrow. By exposing our students to the fundamentals of financial literacy, and cutting-edge technologies, we are empowering them to build a more secure financial future for themselves and the country,” says Ramgareeb.

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