July has been designated Savings Month by the South African Savings Institute.

Going by current data, South African households don't really save much. SA's household savings ratio refers to the income saved by households during a certain period and is calculated and published by the South African Reserve Bank. At the end of 2019, our savings ratio was -0.20%. That means, as a country, we spent more money than we earned and didn't save at all.

South Africans also use debt to cope with extreme financial pressures, which is reflected in the continued rise in credit card advances and the fact that we spent 72.8% of our gross income in 2019 to service debt, according to the central bank.

High levels of indebtedness can be directly linked to low levels of financial literacy. Financial literacy is your ability to make rational decisions when it comes to spending, saving, borrowing and investing.

A lot of work has gone into understanding global financial literacy levels and how they affect financial behaviour, which in turn determines your financial situation as a consumer.

SA has been part of a number of different global surveys to determine general financial literacy levels.

The S&P Global Financial Literacy Survey, which is the world's largest global measurement of financial literacy, found that the global average is only 33%.

SA's financial literacy result from this survey was 42%.

Another consequence of low financial literacy is the lack of understanding of the benefits of investing, leading to low investment levels.

This was reflected in a recent study conducted by the Southern African Labour and Development Research Unit, which had the following notable finding in the 2019 report: "Despite SA's developed financial market, only a small group of South Africans hold investment products. Just 10.59% of the working-age subpopulation indicated they have a pension and only 1.53% indicated they hold mutual funds (unit trust funds), stocks, or shares."

It is clear that our dire financial situation, barring poor economic conditions, can be linked to our limited financial knowledge. If we improve this, good financial behaviour will follow, resulting in increased savings, reduced indebtedness and, ultimately, wealth creation.

So where does one begin this necessary journey?

Here are a few things to remember:

• Get used to reading. There is so much material available regarding personal finance. There are many books and websites dedicated to this subject and it is all at your fingertips.

There are also a few institutions in SA - like the Financial Sector Conduct Authority and the Financial Planning Institute of Southern Africa - that host events in a bid to improve financial wellness. And most of these initiatives are free.

• Get used to living within your means. A lot of the time it is not how much you make but how you spend that creates your financial difficulties;

• Get used to putting money away. If you want to accumulate enough money over your lifetime, you should be saving at least 15% to 20% of your gross income consistently. Consult a professional to help you calculate a more accurate figure, based on your needs and lifestyle; and

• You cannot get rich quickly the legal way. Run for the hills from anyone who claims to possess this "skill".

In some instances, we need to learn things the hard way for the lessons to really stick, and I speak from experience. I've had many instances of financial lack, which have all been as a consequence of poor financial decisions. I can tell you with all honesty that I will never make those mistakes again because I know better now.

It is true that many individuals in this country don't have enough income to allow them to live a decent life, let alone to save.

But one thing that can be controlled to better the lives of many is financial knowledge. Once it is acquired, it will empower better decision-making no matter how much or how little money is at hand.

As noted by the Global Financial Literacy Excellence Centre in its 2020 Personal Finance Index: "Making ends meet is easier for those with greater financial literacy."

• Sidaki, a certified financial planner, is director and wealth manager at Wealth Creed