Promoting the development of young South Africans is futile if it does not include supporting their financial security, says Old Mutual head of financial education John Manyike.
He says too many young South Africans cannot reach their full economic potential because they are trapped in a vicious cycle of debt. Statistics reveal an alarming 214% increase in consumers aged 21 to 25 applying for debt review from 2014 to 2015.
“These statistics show young South Africans are increasingly relying on credit to provide for themselves and their families, and indicate a growing culture of people living way beyond their means. This credit-funded lifestyle exposes people to the risk of getting trapped in a cycle of short-term debt from an early age. ”
Manyike said a key reason for the increase in credit addiction was the low level of financial literacy among young South Africans and it highlighted that financial literacy needed to be taught in schools. “Youth Month is therefore a fitting opportunity to focus on financial education initiatives that can assist in freeing young people from debt cycles and teach them to save and build wealth.”
He went on to explain that ensuring that the youth of South Africa were able to build a financially secure future was essential for the country to reach its true potential.
“Our continent is on the cusp of great development and young people are at the forefront of this growth. With literacy in most sub-Saharan countries now exceeding 70%, the subcontinent, along with the rest of Africa, will in coming years be in a position to offer a vast workforce that is young, literate and urbanised.
“Empowered young individuals who understand the importance of responsible financial behaviour and take charge of their personal finances will ultimately contribute to a more secure future for South Africa,” said Manyike.