Leaving a fruitful financial heritage
Your financial heritage can help you, but can also be an obstacle, depending on the money habits we learned from our parents and grandparents. Their relationship, experience and behaviour with money can influence how we view and manage our own finances.
However, recognising the “inherited” traits that hinder and hold us back financially is key to levelling our country’s economic playing field, which is where financial literacy can assist us in growing into smart, financially-free adults.
“Perhaps our parents struggled to make ends meet and found themselves turning to credit to get by. This could lead to us viewing debt as a necessary part of life, not realising that we have the power to take control of our spending and lending,” says Naledi Totana, compliance officer at local debt advisory firm, National Debt Advisers.
According to the Financial Services Conduct Authority’s Financial Sector Outlook Study 2022, more than 50% of South Africa’s credit-active consumers are over-indebted.
The report found that between 2015 and 2020 the number of credit-active consumers with an impairment record fluctuated between 38% and 48%.
“It is never too late to change our behaviour and set ourselves on the path to live a comfortable life. It is also our responsibility to show sound financial behaviour and instil positive habits in our children to enable them to build wealth,” says Totana.
She says financial literacy plays a key role in helping the South African economy to recover and flourish in the years to come, leaving a fruitful heritage for generations to follow.
Financial literacy a key factor to growing wealth
Our parents may not have been financially savvy, but we do not have to accept this, she says.
“Taking control of our money now can make the world of difference to our future financial wellbeing and that of our children. It is important that we take the time to understand our finances and invest in that which will help safeguard our future.”