Financially smart citizens build resilient households

By David Jacobs
For many South Africans, managing money has become a daily balancing act. Rising living costs, household debt, limited disposable income and unexpected expenses can place significant pressure on families and make it increasingly difficult to plan for the future. The scale of household debt pressures in South Africa is a particular cause for concern. 

According to the National Credit Regulator (NCR), more than 10.5 million credit-active

consumers had accounts in arrears, had defaulted on payments, or had other negative information recorded on their credit profiles by June 2025. This represents more than a third of all credit-active consumers and highlights the financial strain experienced by millions of households.

Against this backdrop, financial literacy is not a luxury or a skill reserved for those with high incomes; it is an essential life skill from which every citizen can benefit. Being financially smart is about more than earning an income. It is about understanding how to manage the money we have, making informed decisions about spending and borrowing, planning for unexpected expenses and knowing when and where to seek help.

As households continue to navigate economic pressures, there is an opportunity for citizens to take greater ownership of their financial wellbeing by developing healthier money habits and becoming more confident in managing their finances. At the same time, government, regulators, financial institutions and civil society have an important role to play in ensuring that people have access to reliable information, appropriate support and the tools they need to make informed choices.

Financial literacy should therefore be seen not simply as an educational concept, but as a practical tool for empowerment. The more financially capable citizens become, the better equipped they are to manage their money, make responsible financial decisions, protect their livelihoods and prepare for unexpected financial pressures.

Becoming financially smart starts with understanding the basics of managing money. This includes knowing how to budget, manage debt, use credit responsibly, distinguish between needs and wants, and plan for future expenses. Simple steps can make a meaningful difference. Households can start by keeping track of their monthly income and expenses, reviewing unnecessary costs, cancelling unused subscriptions and engaging creditors early to negotiate payment arrangements before accounts fall into arrears. While these actions may appear small, they can help households gain greater control over their finances and build stronger financial habits over time.

However, individual responsibility must be supported by an enabling environment that gives citizens access to opportunities, information and support. While households can take practical steps to manage their finances more effectively, government also has an important role to play in addressing the broader economic conditions that affect household financial wellbeing.

Government recognises that addressing South Africa’s economic challenges requires sound policy choices, inclusive growth and structural reforms, alongside practical measures that support households and expand economic inclusion. These measures include social protection programmes, employment initiatives, skills development opportunities and support for small enterprises, all of which can help households strengthen their economic security.

Among these interventions are the Presidential Employment Stimulus and the Expanded Public Works Programme (EPWP), which provide employment opportunities and income support, as well as skills development programmes delivered through the Sector Education and Training Authorities (SETAs). Social assistance programmes, including grants, also provide an essential safety net for vulnerable households, helping millions of South Africans meet their basic needs during periods of financial pressure.

Through initiatives such as the National Consumer Financial Education Strategy and the draft National Consumer Financial Education Policy, government is strengthening efforts to build financial capability and promote the financial wellbeing of citizens. The work of institutions such as the Financial Sector Conduct Authority (FSCA) is equally important in promoting consumer education, protecting financial customers and ensuring that people have the knowledge and confidence to participate safely and responsibly in the financial system. Strengthening these efforts can help citizens make informed choices, avoid harmful financial practices and become better prepared to manage financial shocks.

Importantly, citizens do not have to navigate financial challenges alone. Assistance is available through the National Credit Regulator (NCR), which provides information on consumer rights, responsible borrowing and access to registered debt counsellors. The NCR can be contacted on 0860 627 627 or through its website at www.ncr.org.za.

Consumers can also access financial education resources, consumer protection information and complaint mechanisms through the Financial Sector Conduct Authority (FSCA) by calling 0800 20 3722 or visiting www.fsca.co.za. The National Responsible Gambling Programme (NRGP) is a national initiative that provides free and confidential counselling, treatment referrals and support services for individuals experiencing gambling-related challenges.

By making financial literacy part of everyday life, we can move towards a society in which citizens are not only better equipped to navigate financial challenges but are confident and capable of making informed decisions that strengthen their financial wellbeing and contribute to a more resilient economy. Becoming financially smart is an investment in oneself, one’s family and one’s future. Every informed decision about spending, borrowing, saving and planning is a step towards greater financial security and a stronger financial future.

Financial literacy is ultimately about putting citizens in a stronger position to make their money work for them, rather than allowing financial pressures to dictate their choices.

*Jacobs is Chief Director: Cluster Communication at the Government Communication and Information System