The World Economic Forum recently unveiled a sobering statistic on LinkedIn: only around one-third of the world’s population possesses basic financial literacy. This translates to a staggering 3.5 billion adults, primarily in developing economies, lacking the knowledge to navigate personal finances effectively.

This global knowledge gap is not just a number; it has real-world consequences. It impacts individuals’ ability to save for the future; make informed investment decisions; and avoid predatory financial practices.

But where do we begin to bridge this gap? Here’s how we, as a community, can work together:

Equipping Young People – How Governments Can Help

Financial Literacy in Basic Education:

• Integrate basic financial concepts like budgeting, saving, and understanding debt into the existing curriculums in South Africa.
• In the United Kingdom, expand current Financial Literacy programmes into Primary School-aged pupils. Currently, Finance Education is only taught in secondary schools: ‘Financial literacy education became part of the National Curriculum (England) for the first time in September 2014, as part of citizenship education in key stages three and four (ages around 11-16). This required it to be taught in local authority maintained schools.’ (Commons Library, 2023).
• Many, in the UK, are calling to introduce Financial Education at an earlier school age, including Financial Expert, Martin Lewis, who said, “There’s no excuse – every child deserves to be properly equipped for independent financial life” (E. White, 2024)
• Financial Times Adviser (2024) reported that, ‘Some 23.3mn UK adults have poor financial literacy, making them £20,000 worse off compared to those with good financial literacy.’
• According to a CNBC Africa article (2022), 49% of South Africans are deemed financially illiterate. The article states that the intention would be to, ‘urgently roll-out a financial literacy programme, both digital and print, to learners age 16-18’.
• Being able to learn, and openly discuss financial topics, equips young people with the knowledge they need to make informed financial decisions from a young age.

Work Readiness Workshops:

• Including a financial literacy component within work readiness workshops would allow young adults to enter the workforce with the tools to manage their finances confidently. Governments can set policies and allocate resources towards financial literacy programmes. This could involve targeted programmes for vulnerable populations or initiatives aimed at integrating financial literacy into existing education frameworks.

Bridging the Experiential Gap – The Role of Non-Profits

At SAYes Mentoring, we recognise the critical role of youth development in today’s business landscape. Building a thriving and innovative economy hinges on preparing the next generation to take the reins. However, experience is just as important.

That is where SAYes Mentoring’s unique approach comes in. We champion the power of intergenerational mentorship. By pairing trained and experienced mentors with young people between the ages of 14 and 32, we create a dynamic learning environment. This fosters the transfer of valuable knowledge and experience, while simultaneously nurturing the fresh perspectives and energy younger generations bring. This approach benefits both parties:

• Mentors have the opportunity to share their expertise and leave a lasting legacy by shaping the lives of our youth and future leaders.
• Mentees gain invaluable knowledge and practical experience from seasoned professionals, accelerating their personal and professional development.
• Non-Profit Partnerships: Non-profits like SAYes Mentoring play a crucial role in delivering workshops directly to the community on a number of topics that are relevant to the youth of today, like financial literacy education. Partnering with government agencies and businesses can amplify their reach and impact.

Businesses Stepping Up:

• Financial Wellness Programs: Businesses can invest in financial wellness programmes for their employees. These programmes can offer workshops on budgeting, debt management, and retirement planning.
• Volunteer Programs: Businesses can encourage their employees to volunteer with financial literacy programmes offered by non-profits. This not only benefits the community but also fosters a culture of financial responsibility within the organisation.
• SAYes has been working closely with the London Stock Exchange Group (LSEG), Netto Invest, and Deloittes, to provide meaningful workshops on Financial Education.

Educating Individuals:

While large-scale initiatives are necessary, we can all be financial mentors. Talk to your family and friends about personal finance, share resources, and encourage responsible money management practices. Remember, financial literacy empowers individuals and strengthens communities.

Together, we can bridge the global financial literacy gap. It starts with recognising the problem, then taking action. Let’s become a community of financial mentors, one conversation at a time.

Here are some resources to get you started:

• SAYes Mentoring: https://sayesmentoring.org/
• The World Economic Forum: https://www.weforum.org/
• The Global Financial Literacy Excellence Centre: https://gflec.org/

By working collectively – individuals, businesses, governments, and non-profits – we can equip people with the knowledge they need to navigate the financial world with confidence and build a more secure future for all.

References

CNBC Africa, (2022), Why Financial Literacy needs to start at a grassroots level. Available at https://www.cnbcafrica.com/2022/why-financial-literacy-needs-to-start-at-a-grass-roots-level/ (accessed 30 September 2024)

UK Parliament,  (2023), Commons Library, Finance and Enterprise Education in Schools. Available at https://researchbriefings.files.parliament.uk/documents/SN06156/SN06156.pdf (accessed 30 September 2024)

Financial Times Adviser, (2024) Nearly 24mn UK Adults have poor financial literacy. Available at
https://www.ftadviser.com/your-industry/2024/07/03/nearly-24mn-uk-adults-have-poor-financial-literacy/#:~:text=Just%2020%20per%20cent%20of,a%20good%20understanding%20of%20investments. (accessed 30 September 2024)

Money Saving Expert, (2024) E. White, MPs finally call for compulsory financial ed in English primary and secondary schools after  evidence from Martin Lewis and others. Available at
https://www.moneysavingexpert.com/news/2024/05/martin-lewis-financial-education-committee/ (accessed 30 September 2024)

 

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