One must also keep in mind that learning about finances is not always just from formal sources . Many people learn as children from their parents how to manage their money , be it how to invest and or how to save . But , if one ’ s parents could not invest money , or buy a property and start a business , the child could never learn from their example .
Therefore , countless South Africans , who are now part of the post-apartheid new middle class , started this journey with no knowledge on how to manage their money . As the economy , society and suburbs opened up , many people left the townships for the suburbs to access schools , public services and be closer to workplaces . However , they found that to afford this new lifestyle , they had to borrow disproportionally more to finance homes , vehicles and household items .
Added to this , many financial institutions were also generously offering credit to new entrants into the market economy .
The cultural phenomenon of the so-called “ black tax ” – the social expectation that those with secure sources of income will financially help out more destitute personal relations – have often increased individuals ’ indebtedness .
When young black South Africans from previously disadvantaged communities start their employment and professional journeys , they often do not set financial boundaries when giving to family members . Instead of giving only what they are financially able to contribute , they give beyond their means , often borrowing to give to family relations , wreaking havoc with their own personal finances .
The post-apartheid culture has also unfortunately have become strongly materialistic . New belief systems appear to have taken hold that places more value , status and social belonging on material assets .
Social expectations in society demand that professionals , for example , drive expensive cars , wear expensive clothes and live in expensive homes to be seen as being successful .
Sadly , the materialistic trend was in part started by newly elected public representatives and civil servants who , after living modestly in townships , suddenly started to receive huge remuneration packages . Instead of setting a tone of humility , modesty and prudence , they have splashed on “ bling ” – creating a materialistic culture . Others – with more modest incomes – then try to keep up .
Given the appalling levels of personal finance skills in this country , improving understanding of personal finance should take place in all life phases , by multiple institutions . I suggest the following :
1 . The first place to start to embed a basic understanding of personal finance is for parents to teach their children how to manage money .
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