Abstract
This paper is part of a working paper series in responsible financial management in the South African context. In this paper we examine the aggregate level of household indebtedness, the historical levels of unsecured loans, and the statistics of civil cases for debt. On the basis of our literature review, we observed that South Africans, in general, are heavily indebted.
The authors are of the view that the bleak picture painted by reports covered in our literature review is symptomatic of the low levels of financial literacy in South African society. Thus, it was deemed crucial that the next generation is surveyed to estimate their financial literacy maturity. In this regard, the financial literacy levels of students that are studying towards an accountancy qualification in the South African context were surveyed. This survey was carried out in order to determine their grasp of the use of funds in the context of debt and spending.
In terms of the research approach, this study followed the Jump$tart Coalition’s criteria for determining levels of financial literacy. Accordingly, a mean score below 60% is considered financially illiterate. Results indicate that on aggregate, students that are studying towards an accountancy qualification scored 63.49%, which is close to a level deemed financially illiterate by the Jump$tart Coalition. This confirms our assumption that in general, South Africa has a low level of financial literacy.