Financial literacy is key

Everyone seems to have a view on how to provide free South African tertiary education.

If you are a successful entrepreneur or wish to become one, you would have already understood the solution. The simple answer is for schools or parents to teach children financial literacy and the value of money.

For 130 years, millions of immigrants and refugees from all parts of the world have left the countries of their birth for the United States.

For all of its problems, the military-industrial economy of the US remains the entrepreneur’s choice destination.

It endures as an economic empire designed for people with courage and determination.

While visiting California, I investigated a financial literacy programme offered to high school learners by the Loyola Marymount University in Los Angeles. According to programme director Professor David Choi, school leavers (including many graduates and parents) have a very poor understanding of finances and basic economics.

For educators, it seems more important to calculate the area of a triangle than to calculate compound interest, or to teach how an income and expense budget works.

School sports or obtaining exceptional university pass marks often take precedence to learning critical financial life skills.

And when it comes to practical financial abilities, sometimes the subject goes from the textbook of the teacher to the notebook of the student, without going through the minds of either.

So let us imagine a school curriculum which includes economic and financial literacy. The student would learn about income, expenditure, delaying instant gratification and saving for retirement, rainy days and for the betterment of their children.

They would know about FIAT (not the car), progressive taxation, the value of money and inflation.

Critical thought would also be given to South Africa’s eco- nomic system. It may not be perfect, but for now it is the option we have chosen from other less successful competing systems.

Once the learner has grasped the subject, they would be well on their way to understanding what contributes to successful entrepreneurship. They would join the ranks of the well-informed.

If you wish to guarantee your child a tertiary education, start a savings plan to pay for this, plan ahead or obtain a loan or charitable bursary. Or, as many have done, pay for your own education.

There is no single explanation why in the short space of 150 years, the US has contributed more to human development than any other country. But one of the reasons is the US taxpayer and community are not the primary protection against life’s challenges.

Successful Americans take personal responsibility for their life choices. They do not burden others with bad decisions.

In South Africa, the narrative and practice is that the state and taxpayer are primary caregivers.

Parents and educators, the narrative can be wrong.