As South Africans, our experience with money is probably as diverse as our population. Unfortunately, the significant gaps in understanding basic financial concepts continue to be a barrier to living the lives we deserve. This makes taking a one-size-fits-all approach to financial education as effective as trying to build a house using only a hammer. While access to financial infrastructure is one way to broaden socio-economic inclusion, another is addressing the knowledge gap in ways that work. 

This needs to be a nuanced approach that’s sensitive, sustainable, and accessible. It needs to empower people to live with confidence, go after their goals and believe they can build a better life. Ideally, it should start in childhood, but be an ongoing journey. In fact, the earlier in childhood we can start, the better.

Starting Young

It has long been known that play is one of the most powerful ways in which children learn. This is what makes the Sanlam Savings Jar app such an innovative and apt solution to the question of how to teach children sound financial lessons. In the app, which essentially gamifies the idea of saving, players become young dragon masters embarking on a fantastical quest. The more they save, the more their mystical dragon grows.

Mariska Oosthuizen, Head of Brand at Sanlam, says, “We know that gamification is a powerful means to educate young people. The Sanlam Savings Jar breaks down basic financial concepts, like planning, goal setting, needs versus wants, and appreciation of money and how to earn it. It’s critical to teach children these concepts early on as habits are formed from as young as seven.”

By making the idea of saving fun, whether for a rainy day or a sunny one, much of the stigma and discomfort is removed from conversations about money. A key first step in closing the financial literacy gap in South Africa involves families being able to talk freely about the subject.

Turning it around

An alarming finding comes from the Organisation for Economic Co-operation and Development, which ranked South Africa the worst of 30 countries for financial competency in 2018. This worrying reality need to be addressed urgently and head-on.

Teaching children how to plan, especially where money is involved, starts to empower them to live with confidence. Upskilling their financial literacy will do exactly this and help South Africa as a nation, move away from some of the troubling tendency toward over indebtedness. 

Here are a few ways you can help improve your child’s financial literacy: 

1. Teach them about managing debt: Debt is a tricky one to teach little people about. Offer to ‘advance’ your child the money they need for a desperately desired toy, but make sure they understand the ‘conditions’ upfront. Talk about what the toy is worth. Now, show them the impact of interest. By taking your loan now, they’ll have to ‘pay’ more for the toy in total. Work out a roster of chores they can do to ‘pay back’ the money. And make sure they know that if they don’t do the chores, they could lose their cherished toy! It sounds harsh, but it’s wise to teach these lessons to older children in the safe space of your home.
   
2. Practice saving and investing for different goals: Ponies and Playstations don’t grow on trees but the money you need to buy them can be grown in a bank account. Through games like the Sanlam Savings Jar app your little one can take their first steps to becoming Baby Bezos.
   
3. Give them financial confidence: Few things are as gratifying as the hands-on-hips confidence your mini me displays when they do something well. That confidence can be built with financial literacy too. Give them little savings tasks and reward them when they do these well. If it all goes according to plan then, in a few years’ time, they’ll have the financial confidence to start to build their best, independent lives.