South Africa is drowning in debt. In fact, according to the Economist (2018), more people have loans than jobs.
We are some of the biggest borrowers in the world and our habits are increasing at an accelerating rate. So, why do we continue to pass this on from generation to generation; what if we could curb the ‘instant gratification’, ‘spend-now, pay-later’ mentality in our children from an early age?
Parents are the biggest influencers of children. They rely on us for life lessons, support, nurturing and knowledge, yet there is very little engagement in the household around savings, money and financial literacy in general. We live in a time of reckless borrowing and lending, and it’s up to us to teach our children that it’s not just as easy as ‘taking out more credit’.
Kathryn Main, Founder of Money Savvy Kids (MSK) says that the snowball effect continues to hurtle through South Africa and Africa as a whole.
“As if raising children in a tough climate isn’t hard enough, we now need to try and balance it all whilst navigating a professional life, a personal life, finances and life in general,”
As a mother of three, Kathryn’s parental instincts recognised the difference that financial literacy could make in a child’s life. With a firm belief in the difference that raising money savvy kids could make, what started off as a passion project has evolved into a business and today MSK partners with various big corporates to develop custom financial literacy content – all developed by Kathryn’s full-service advertising agency, Main Multimedia.
“Some studies show that 74% of the youth are not involved or included in the daily financial management of their household. However, results showed that children who are involved display a higher propensity to save, more cautious spending behaviour and a better understanding and knowledge of financial products (Douglas Lamdin’s Consumer Knowledge and Financial Decisions: Lifespan Perspectives, 2011)” Kathryn continues.
With all this said, Kathryn explains that partnering with corporates not only in the financial sector but in broader sectors has become important. “It’s no secret that corporates have the power. When the system fails us, we look to those with resources and authority. Poor financial literacy follows us forever and we see society grappling with finances daily. It also makes us question what the future of Africa looks like,”
“We try our best to enable our future leaders by providing them with the best in-school education, but we fail them at home. Even the best schools lack in areas of financial literacy and it’s up to those with a bigger voice to make a difference” she continues.
A recent study on financial literacy in South Africa also highlighted the effect that poor education has on entrepreneurs, who now need to make responsible decisions to grow a business. Kathryn adds to this saying: “In a country that promotes and thrives on entrepreneurship, this is very concerning”.
By collaborating with corporates such as EXXARO, Woman’s Development Bank (WDB), Ischool Africa and many more, MSK creates custom financial literacy aimed at empowering and the educating the youth. “We tailor content to children as young as 4-years-old because it’s never too early to learn these lessons. We see so many parents focusing their time and effort on helping their children to get good grades, yet they forget about the issues that will follow them around forever; regardless of what grades they get,”
The youth are drowning in debt and interest from student loans. “They don’t understand the basics of credit scoring and so their credit score gets messed up. They can’t buy a car, a house or even get a cell phone to their name. So, they struggle along for 10 or 20 years, trying to get rid of the debt and improve their credit score often to no avail,” Kathryn continues.
“MSK promotes knowledge, attitudes, and behaviours amongst the youth to help them become financially independent. And as our mission statement says, we are set to empower the South African youth through financial training and awareness, creating the start of a financially educated youth era”.
Kathryn concludes saying: “We need to put the power back in their hands and turn these beautiful little people into responsible adults. It’s up to us as parents with the support of corporates to enable and empower the youth of today.”
View article on Entrepreneur Magazine: https://www.entrepreneurmag.co.za/entrepreneur-today/why-raising-money-savvy-kids-matters-and-the-role-that-corporates-play/