Money matters should form part of an education for life

“South Africa faces a consumer credit crisis, partly because so many people enter the world of work without a good grounding in money matters that enables them to make wise financial decisions,” she says. “While they should be building wealth for the future and preparing a stable lifestyle for their families, many new graduates are running up more debt when they haven’t even paid off their student loans.”

According to Statistics South Africa, total consumer debt in the country is now close to R1,5 trillion. Credit information bureau, TransUnion, reckons that the number of borrowers with impaired credit records – three or more payments in arrears – has risen to nearly 50%. And behind these stats is the destructive impact that excessive debt has on consumers’ lives, says Rabson.

“Many South African consumers do not have the basic grounding in money matters needed to make an informed decision before they buy that new iPhone or car,” says Rabson. “They are easily seduced by banking and retail marketers who offer them easy credit without helping them to understand the repayment terms.”

Concerned by this reality, Boston City Campus & Business College, has resolved to offer financial education to its students, along with the rest of their studies. Boston has developed a short high impact course with The Money School, a financial education company that specialises in equipping people to achieve their financial goals.

This Financial education short course is available to students registered for any course offered by Boston in 2014 and is presented by The Money School. This initiative is funded by the newly launched, “The Truth About Money – A 1Life initiative”, that aims to increase financial understanding across South Africa.  All 1Life clients and Boston students have access to the course and any South African can apply for the financial education course, however access will be based on the person’s motivation and The Truth About Money’s funding availability.  “For Boston, we believe that education isn’t just about preparing for the workplace, but for life,” Rabson says. “So we see it as a natural extension of our role in preparing our students to plan for their futures and be able to commit to things like education and financial stability”.

Rabson notes that only 3% to 6% of consumers will ever be able to afford to stop working, while the average South African spends 75% of his or her salary on debt repayments. Against that backdrop, schools and tertiary institutions have a critical role to play in helping their students learn how to keep debt-free and invest money for the future.

Rising food and fuel costs, coupled with slow economic growth, are hitting many South Africans in the pocket. With a recent interest rate increase adding to the woe – and more expected during the course of the year – it is more important than ever to be credit-wise, says Rabson.

“Very often, the reason that people become wealthy is simply because they know things that others don’t. The good news is that the ability to manage one’s money well is a learned skill; just like riding a bike,” adds Gary Kayle, Money Coach – The Money School.

“In our training, we are able to identify parents who struggle financially and thus allow us to assist these parents by educating them to manage their money in a more responsible manner.  We aim to show people how to avoid frustrations and financial pressure by planning wisely for the medium and long term rather than giving in to the temptations of short term thinking.”

*If you are not a Boston student and would like to learn how to take charge of your money with this financial education course, you are welcome to apply at www.truthaboutmoney.co.za and complete the application form on the website.