How can South Africans improve their financial literacy?

MODERN life requires us to know how money works.

- MARTIN HESSE

We don't need to be financial whizzes, but we need to know the essentials and, importantly, acquire the skills and modify our behaviours if we want to be financially independent and secure. It's this blend of knowledge, skills and behaviour-modifying experiences that constitutes financial literacy.

This week I chatted to Sharon Hamman, Senior Legal Adviser at Momentum, who shares my concerns about how South Africa's low level of financial literacy is impeding economic growth and progress in addressing inequality.

She says people become more money-savvy when they start earning and gain experience in managing the money they have earned.

"All those little actions you do opening a bank account, researching interest rates, applying for a credit card and the experiences you go through getting into trouble repaying a debt, for example, and realising you need to change your behaviour towards money all contribute to your level of financial literacy," she says.

However, education is a prereq-| uisite. Before going out to earn a living, South Africans need to know, for example, the various types of financial products available to them and have a grasp of concepts such as value, compound interest, inflation, risk and credit.

"Financial literacy is built on the foundation of education, because that is the starting block," Hamman says.