So many individuals work hard every day to earn their keep but struggle to make ends meet, living from hand to mouth without any savings or long-term investments. This is a reality faced by many South Africans, especially low-income workers, where a lack of financial education keeps them trapped in a cycle of poverty.
Financial literacy is about empowering all individuals, regardless of their income, with the tools to make informed financial decisions, set goals, and plan for the future. For low-income workers, this can mean the difference between living in constant financial stress and building a foundation for long-term financial stability.
What if we could change this narrative? What if we could empower low income workers with the knowledge and skills to take control of their finances and provide them with tools and resources to build a healthy financial future and break free from debt and loans?
A Different Approach
Psychological stress and low morale are constant companions of low income workers as a result of constantly worrying about their finances. For employers, the impact of a lack of financial literacy among employees is felt by decreased motivation, high absenteeism and reduced productivity. Changing this narrative starts with showing employees that their financial well-being is valued, demonstrating care for their head and heart, and acknowledging their worth beyond just being a worker.
“We believe that by integrating individuals’ head, heart and hands, people can develop a comprehensive understanding of their finances, make informed decisions aligned with their values and goals, and effectively manage their financial resources to build a secure and healthy future.”
Problem and Opportunity
While a lot of focus is placed on saving money in financial literacy education, not enough is said about how to spend your hard-earned money wisely. Engaging the head, heart and hands of low income workers - defined as those who earn approximately R5,380 per month - in South Africa is crucial to changing the financial trajectory of their lives. Furthermore, despite living in an era of advanced technological breakthroughs and abundant information, low income earners still believe that banking products and services are not designed for them but for “people with money”.
Many low-income households in South Africa include unemployed youth aged between 15 - 24 years. These individuals have missed the opportunity to learn about financial concepts as part of their schooling. It’s here where employers have the opportunity to fill a much-needed gap in the financial literacy of their workforce.
Not only are these young individuals who often enter the workforce at a very young age, uninformed about financial concepts like budgeting, saving, investing, retirement planning, debt management, and banking, but they are also unaware of financial aspects that affect them outside of their households, such as financial markets, interest rates, and the economy in general.
Head: Building Knowledge and Understanding of Financial Concepts
Engaging the head involves educating low-income workers through language they can understand and encouraging them to make different decisions for a better future. This takes place through formal education and self-education, as well as obtaining advice from financial professionals.
Heart: Discovering What Lies Beneath the Surface
Engaging the heart means forming a connection, helping individuals explore their values, beliefs, attitudes, and behaviours about money, and addressing emotional triggers associated with spending, saving and investing.
Hands: Moving From Knowledge to Application
Engaging the hands focuses on practical application of financial and emotional awareness by taking action i.e. making financial plans and managing debt in real life. This includes setting goals, making budgets, saving and investing, as well as managing debt. It also involves finding the right tools (banking products and people) that can help you achieve your financial goals.
More Than Lip Service: Show You Care
To make a real and lasting difference in the lives of low-income workers, providing access to financial literacy resources should be an ongoing initiative within organisations, not just during employee onboarding. Every individual's financial needs change throughout life, from saving for emergencies and supporting households with young children, to planning for retirement and providing for your loved ones when you’re no longer with them. Solidify the learning by providing support and guidance during important financial decisions, such as retirement planning, long-term savings, and funeral plans.
By investing in financial education and resources, we can break the cycle of poverty and empower low-income workers to build a brighter and financially healthy future for themselves and their families.
At Picsa, we dream of seeing the lives of low income workers in South Africa flourish. If you’re interested in digging deeper and learning more about the “head, hands and heart” philosophy to help your employees become financially secure, reach out to us. We’d love to hear from you.