Financial Literacy

Academy of Wealth- School of Entrepreneurship

Financial Literacy

The Academy of Wealth strongly believes strongly in building a financially literate population and that such learning should be at all levels of life. this is because as a person develops their needs and wants change which creates changes in their financial behavior. To this end Academy of wealth has a number of courses which have been developed covering all facets of being an employee. This is great for the Employer who can use this as a guide as to what each employee should be learning as they reach various milestones in their employment journey.

  • Our content is adaptable to suit the needs of the target audience be it schools, communities, government employees, teachers etc.
  • We provide basic financial literacy by way of the Financial Passport programme which is an animated, interactive eLearning programme which covers the basic elements of financial literacy
  • Our Power8 fundamentals programme which covers the 8 most important principles of being successful with money.
  • Understanding Your Retirement Fund- Most businesses these days have a pension or provident fund but employees have very little understanding of the benefits of belonging to such a fund. This course is absolutely critical for all employees no matter what level they are at.
  • The Employee Guide to Managing Personal Debt is an important element of the course and teaches the participant the dangers of buying goods and services on credit.
  • Dealing with a Sudden Windfall- In many organizations employees are rewarded in terms of share empowerment schemes and when these shares mature they can come into a great deal of money. This module teaches them how to deal with it.
  • Developing a culture of Saving- This course deals with the need to understand that we need to save to get the things we want. It needs to be something that is built into the psyche of the employee.
  • Planning for Retirement- All employees need to learn the importance of planning and preparing for retirement unless they want to work all their lives or become a liability of the State. This course takes the employee through the phases of getting to a comfortable retirement.
  • Fast Tracking your Retirement- This is for those employees who have never been exposed to retirement planning but are not far from being placed on retirement because of their age.
  • Academy of Wealth would be happy to introduce other programmes as required such as Developing your Financial Life File as well as the Do’s and Don’ts of Financial Planning.

If you are interested in proving financial literacy for your employees, please see the recommended table below:

PROPOSED FINANCIAL LITERACY PROGRAMME FOR SCHOOLS

It is essential that financial literacy should start at school! Pupils will be able to make more informed decisions about their own futures if they have some financial understanding of what life after school entails.

Let’s assume that Sipho is completing his schooling and his parents have told him that they are unable to help you financially apart from allowing him to stay in the family home. Sipho has decided to become a teacher as he really enjoy passing knowledge on.

Sipho has a mind that likes to be challenged and has made it his business to educate himself with regard to money matters and has been fortunate in that some of his teachers have helped in this regard. They have taught him not only to determine his long-term goals but also that throughout his life money making decisions need to be made and acted upon. One’s happiness, health and family life can be dramatically affected by financial events. We all need to be in control of our finances.

Ultimately it is your goals and aspirations, as well as your lifestyle choices that will determine the path you follow and will shape your financial future. Society is not teaching people soon enough about financial literacy, and pupils are making critical decisions as to what careers they are going to pursue, without any input from a financial point of view.

So what challenges do you face if you were Sipho in the above scenario?

Before he can embark on his journey he needs to have answered the following questions:

  • Loans for studies- the amount, how much needs to be repaid, interest rates and costs.
  • Day to Day living expenses- food, clothing, transport, medicines etc.
  • What income potential- part time job?
  • Sipho must draw up a full list of his needs and carefully draw up a budget.
  • He should open a bank account

Sipho will be under pressure to stick to his budget whilst he is studying. Very importantly he must be aware of the dangers of borrowing. It is easy for people who are struggling, to go to Micro lenders who will grant loans, but with excessive costs and interest rates.

Sipho needs to also understand that should he not pass, there is a cost as loans need to be renegotiated and his day to day expenses continue as well as the fact that his income is under pressure until such time he is able to take up full time employment.

He must re-assess his goals and look to the Short to Medium-term whilst knowing what his long-term aspirations are.

Needs – very important to relook at needs such as accommodation, transport etc.

Stage of Life- married, children, kids’ education, holidays

Saving and investments- must earnestly save and invest to meet long-term goals

Understand the dangers of succumbing to his wants which could be fancy cars, cell phones, watches etc. which would all probably be financed on credit.

In order to do this, he will need to:

  1. Assess his retirement fund if the school he works for has such a fund
  2. Save and invest in order to have the additional funds he will need to retire at that age
  3. Become debt free as soon as possible
  4. Plan carefully to achieve these goals

Conclusion

Whilst soft financial literacy needs to be taught in primary school (this would include learning about money, notes and coins, buying and selling etc.) formal financial literacy training needs to take root in high school thus enabling pupils to make career choices based on the goals they wish to set for their lives.

  1. Know the difference between needs and wants
  2. Be able to prepare a budget
  3. Have opened a bank account
  4. Know about saving
  5. Understanding the implications of borrowing
  6. Educate themselves about money- be aware of scams etc.
  7. Have an idea of the career they wish to follow and the impact this has on their finances
  8. Credit and credit scores
  9. Learnt about investments and insurance
  10. Plan for retirement
  1. 20-30 hours of inter-active, animated, graphic eLearning
  2. Access on mobile, tablet, laptop or desktop
  3. Ability to learn at own pace
  4. Certificate of completion
  5. Learner Management System
  6. Quizzes and tests
  7. Courses are flexible and be adapted to meet learner needs e.g. language
  1. The most basic human need is food – True or False
  2. Preparing a monthly budget is not necessary if you have a bank account- True or False
  3. In terms of wants and needs shelter is a want. True or False
  4. A sign of over-indebtedness may result in borrowing money to pay other debts. -True or False
  5. Inflation will affect our spending power. True or False
  6. If the rand moves from R12 to 1 US Dollar, to R14 per 1 US Dollar the rand has strengthened. – True or False
  7. People who spend more on wants than needs will most likely have made use of credit – True or False
  8. If you borrow from a micro lender you will need to supply them with your bank card and pin number – True or False.
  9. Interest is calculated using a percentage of the amount you put into a savings account. True or False
  10. You should start planning for retirement at age 40- True or False