FINANCIAL literacy should be introduced in schools to enable South Africans to manage their finances properly.
This emerged at the release of the Consumer Financial Vulnerability Index for the second quarter of 2011, which showed that consumers were struggling to save and service their debts.
The index, established in 2009, examines the overall vulnerability of the country's consumers in areas of income, expenditure, savings and debt servicing.
The Consumer Financial Vulnerability Index is conducted through a partnership between Unisa and sponsors MBD Credit Solutions.
South African consumers felt more vulnerable in the second quarter than they did in the first one - 1.6% more than the first quarter and the index increased from 4.39 points to 4.46.
It further showed that consumers felt financially vulnerable in terms of their income and savings which was attributed to higher unemployment and poverty levels that impacted negatively on consumers' ability to generate income and save money.
Unisa research director Professor Carel van Aardt said the survey showed the middle class living beyond its means.
"They say other people have got a car, I must also have one, other people have a house, I must also have it. In that way, they enter into a lot of debt.
"Consumers often make decisions they believe will benefit them in the short-term, but these often land them deeper into poverty," he said.
Van Aardt attributed consumers' poor decision-making on a lack of financial literacy.
"Educational institutions are key. We do not just have a financial literacy skills crisis but a general skills crisis.
"We need to revamp our educational system so that it also entails financial literacy from Grade One," he said.
He said all indications showed that even in the third quarter, consumers would still be financially vulnerable because of the country's low levels of economic growth.
"The fourth quarter is usually one of optimism when people spend more because they have bonuses. So you might expect a little bit of a drop in their vulnerability," he said.
Van Aardt said such pressured economic conditions painted a bleak future to unemployed people.
'Consumers have a skills crisis'
FINANCIAL literacy should be introduced in schools to enable South Africans to manage their finances properly.
This emerged at the release of the Consumer Financial Vulnerability Index for the second quarter of 2011, which showed that consumers were struggling to save and service their debts.
The index, established in 2009, examines the overall vulnerability of the country's consumers in areas of income, expenditure, savings and debt servicing.
The Consumer Financial Vulnerability Index is conducted through a partnership between Unisa and sponsors MBD Credit Solutions.
South African consumers felt more vulnerable in the second quarter than they did in the first one - 1.6% more than the first quarter and the index increased from 4.39 points to 4.46.
It further showed that consumers felt financially vulnerable in terms of their income and savings which was attributed to higher unemployment and poverty levels that impacted negatively on consumers' ability to generate income and save money.
Unisa research director Professor Carel van Aardt said the survey showed the middle class living beyond its means.
"They say other people have got a car, I must also have one, other people have a house, I must also have it. In that way, they enter into a lot of debt.
"Consumers often make decisions they believe will benefit them in the short-term, but these often land them deeper into poverty," he said.
Van Aardt attributed consumers' poor decision-making on a lack of financial literacy.
"Educational institutions are key. We do not just have a financial literacy skills crisis but a general skills crisis.
"We need to revamp our educational system so that it also entails financial literacy from Grade One," he said.
He said all indications showed that even in the third quarter, consumers would still be financially vulnerable because of the country's low levels of economic growth.
"The fourth quarter is usually one of optimism when people spend more because they have bonuses. So you might expect a little bit of a drop in their vulnerability," he said.
Van Aardt said such pressured economic conditions painted a bleak future to unemployed people.
Would you like to comment on this article?
Register (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Trending
Latest Videos