If we’re serious about fixing South Africa, I believe the highest priority area to invest in is education. Other areas like security, health and transport are surely important, but the most important is education.
I don’t mean the narrow sense of formal education – although government’s atrocious performance in this arena is indeed a massive problem. It’s about holistic education that touches all lines of intelligence. Like helping children learn emotional and moral intelligence from healthy role models at home, or learning in school economics how to manage a household or small business’ budget.
Oh, wait, “school economics” doesn’t really happen, does it? Although it’s been an official subject since 2011, it’s compulsory only in senior phase. Further, according to Department of Education’s 2011 policy statement on economics, the subject is allocated only 2 hours per week. From grade 10 it becomes optional. Sadly, judging by the dry content my daughter sees in her grade 8 class, I’m not surprised most scholars drop it as soon as they can.
South Africa’s financial literacy rates are poor: a 2017 story in Fin24 cites a rate of 51% reported from a comprehensive study by Financial Services Board. This is affirmed by the frequent anecdotal stories shared with me by many accountants and financial coaches that, almost without exception, their clients are clueless about rudimentary business accounting or simple personal budgeting.
It’s no surprise then that many failed start-ups blame financial stress as the reason for failure. It also makes sense that, according to a 2018 Money Marketing article, South African households have a whopping debt-to-disposable income ratio of 72.6%. The National Credit Regulator reported in 2014 that, of the 21.7 million active credit consumers, 44.2% had impaired records. That’s horrendous!
But we can fix that. Blaming our parents or government is no excuse for staying stupid. As individuals and as an economy, we know we’re not doing well in the financial intelligence space. We also know how a low financial quotient hurts us. And we know what we can do about it – get educated!
Getting clever about money really is not hard – even if we put in only 30 minutes a week doing something to grow our FQ, it can change our lives. It could be as simple as watching a few YouTube videos or taking a course. Or you could hire a business coach or financial coach – even a single consultation can help solve recurring challenges permanently. (I’m happy to refer if you’re interested.)
If you’re a business owner, you really can’t afford to not invest in this pivotal skill to manage your business better.
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