Financial Literacy Should Be Taught In Schools

A society that teaches trigonometry, but not compound interest is not educating its citizens. It is preparing them to fail quietly.

Photo by Towfiqu barbhuiya on Unsplash

Above any subject other than language comprehension and numeracy, financial literacy should be prioritised as a subject to be taught not only in schools and universities, but to all South Africans.

South Africans, alongside most of the global population, exhibit a dangerous level of financial illiteracy that has led to unsustainable debt, impoverishment and an inability for most South Africans to ever retire safely.

Household debt-to-disposable income was 61.6% in Q3 2025. This is an improvement from 2015-2016, where it sat at over 70%, but still has room for marked improvement.

Over 10 million consumers have impaired credit records. The household saving rate is -1.2%. The gambling industry has grown as more and more South Africans are tricked into thinking it’s a valid way to make money. The National Treasury cites that R1.5 trillion was wagered in the 2025 financial year. 25% of respondents in the Western Cape alone reported frequenting a gambling establishment more than 20 times in the last 6 months. 85.7% “high-risk gamblers” reported betting more than they could afford, with 42.9% selling possessions or borrowing money to gamble.

All of this leads to broken families, increased poverty, and a lack of economic growth. Imagine if R1.5 trillion was invested in the equity market in 2025. Not only would these families be growing their savings, but the economy would also be growing – allowing companies to employ more people and expand.

The problem is that the only way a person can learn financial literacy is through a family member, if they learn a financial subject in university, or if they are lucky enough to stumble upon a good book or YouTube video. And the latter is a risk. For every decent book or YouTube channel on investing, saving and financial literacy, there are thousands of grifters giving terrible advice that will lead to destroying a person’s finances.

In Exclusive Books, the Business Section was full of Robert Kiyosaki’s famous “Rich Dad, Poor Dad”. This book has sold millions of copies worldwide and is recommended as one of the best books on how to get rich.

Yet Kiyosaki is billions of dollars in debt (billions with a B!) and recommends disastrously financially illiterate tactics like borrowing too much money, borrowing to pay off that debt, and never investing in the stock market.

Compare grifters like Kiyosaki and get-rich quick scammers with books like Morgan Housel’s “The Psychology of Money”.

Housel doesn’t promise to make people rich and doesn’t give people a silver bullet to quick wealth. Instead, he teaches essential life lessons for how to view money and how to accumulate wealth in a responsible and realistic manner.

South Africa would be a richer, happier place if this book alone was mandatory reading in high school.

Financial illiteracy in South Africa is not merely a matter of poor individual choices. It is the predictable outcome of an education system that systematically avoids teaching people how money, debt, interest, risk and long-term compounding work.

The state mandates schooling for more than a decade yet sends young adults into the world without the tools to interpret a loan agreement, evaluate an investment, or distinguish between speculation and saving. This vacuum is quickly filled by credit providers, gambling platforms, and financial grifters, all of whom profit from confusion rather than clarity.

Some argue that schools are already overburdened, and that financial literacy should be the responsibility of parents. This assumes, unrealistically, that parents themselves possess adequate financial knowledge. The statistics clearly show that this is not the case. A society cannot rely on intergenerational transmission of skills that were never learned in the first place.

Others argue that financial literacy is a luxury for the middle class, and irrelevant to low-income households. This argument gets the issue precisely backwards. The less margin for error a household has, the more essential it is to understand interest, fees, debt traps, and basic risk. Financial ignorance is far more costly to the poor than to the wealthy.

Financial literacy need not be complex or ideological. A basic curriculum would include budgeting and cash-flow management, the mathematics of interest and compound growth, the effects of inflation, the difference between speculation and investing, and the risks of leverage. Students should leave school understanding why gambling is not investing, why debt compounds faster than income, and why time in the market matters more than chasing returns.

Financial literacy is ultimately about dignity and freedom. A financially literate citizen is less dependent on the state, less vulnerable to exploitation, and better able to plan. Broad-based financial competence would strengthen household resilience, deepen capital markets, and support sustainable economic growth. It would also reduce pressure on the fiscus by enabling more South Africans to retire with savings rather than dependence.

South Africa does not suffer from a lack of ambition or effort. It suffers from a lack of financial understanding. Until we teach citizens how money works, we will continue to confuse consumption with wealth, gambling with investing, and debt with opportunity. Making financial literacy compulsory would not solve every economic problem, but it would give South Africans a fighting chance to solve their own.

A society that teaches trigonometry, but not compound interest is not educating its citizens. It is preparing them to fail quietly.

Nicholas Woode-Smith is the Managing Editor of the Rational Standard. He is a senior associate of the Free Market Foundation and writes in his personal capacity.