According to Haley Parry, facilitator of 1Life’s Truth About Money (TAM), a free financial education and literacy service, there are a lot of poverty-stricken high-income earners who do not have two coins to rub together and have to constantly borrow to make ends meet.
“There are people who use a large part of their income to pay debt; we need more people investing and saving, it’s one of the ways the poverty cycle can be broken,” Parry said.
According to research by Statistics SA, poverty is on the rise, with more than half of citizens dirt poor. The poverty headcount has increased to 55.5% from a series low of 53.2% in 2016, translating to 30.4million citizens living below the breadline.
Poverty is actually harsher on the income earners, because their income prompts them into the vicious cycle of spending and borrowing way beyond their means.
Parry said the poverty trap stemmed from a lack of financial literacy and poor access to financial education, which leads to people owing large amounts of debt and making poor financial decisions. “As such, if we hope to reduce poverty, one way in which we can create a positive impact is to provide access to financial education, teaching South Africans how to best use the money available to them, no matter how much it is.”
TAM does this through a financial education course that is offered for free. The course is worth R2900 and aims to educate South Africans around sound money management by teaching them the fundamentals of making their money work for them. “Through this we hope to help break the cycle of poverty by creating a basis on which people can build their financial independence - using what they have available to them,” said Parry.
This is a six-hour video-based course offered nationwide through the Boston Campuses and it has, to date, catered for more than 50000 South Africans, most of whom are now money savvy.
Parry said the course offered a comprehensive overview of money management, debt training - how you get into debt and ways of getting out of it, savings and investments, and the concepts of how to do all of this.
TAM offers a template and downloads to its trainees that serve as a crutch for everyday implementation of the concepts.
Other benefits that can be applied through TAM include: a Wills and Estate benefit where one is assigned a legal practitioner to help with setting up a will. There is also assistance with debt management through which a qualified debt counsellor can help one get on top of their debt.
“Debt is by far the biggest reason people find themselves in financial distress. It is hard to break the cycle. Learning to manage money is a learned skill, unfortunately it is not taught at schools - that’s why courses like these are crucial to help people manage the money they do have, better.”
If you would like to access any of the free benefits mentioned in this article, please visit www.truthaboutmoney.co.za.