25 July 2024
These are traits the nation should nurture, alongside Gen Z and Millennials’ ‘hustle’ mentalities, which are particularly poignant given the pervasive youth unemployment rate.
The second instalment of Sanlam’s Financial Confidence Index takes ‘South Africa’s temperature’ in terms of the nation’s shared financial confidence. It reveals a nation preoccupied with present stresses, with nearly half the population having a below average – or lower – Financial Confidence Index (FCI). South Africa’s overall FCI remained stable with an index score of 47 out of 100, with slight improvements in Financial Self-determination and Financial Wellbeing.
Mariska Oosthuizen, Chief Marketing Officer at Sanlam, says, “Our research partner, Africa Response, surveyed 1,610 individuals to index three key components of financial confidence: Financial Self-determination (FSD), Financial Resilience (FR) and Financial Wellbeing (FW). What stood out was the astuteness and optimism of Gen Z, which had higher FSD and FR than other generations, possibly due to digital savviness opening access to information. We have a real opportunity to shift financial inclusion in South Africa through relevant financial education that empowers a younger generation that’s already entrepreneurial-minded and investing-oriented.”
The Index defines financial confidence as: The level of assurance and belief one has in managing and navigating one’s financial life effectively.
This comprises three key components:
Sipho Mncwabe, Regional Executive at Sanlam and Sanlam FCI expert, adds, “It’s consistently evident that education, income, and employment are major contributors to confidence, impacting every aspect, from resilience to wellbeing. Low-income earners are often trapped in a cycle of survival behaviours. When you’re struggling to make it to month-end, you become preoccupied with the present, with limited capacity to look to the future.
“However, across all generations and demographics, we saw an eagerness to pursue financial learning. Positively, 69% of South Africans said they continuously build their skills to increase their earning power, and 56% said they believe their personal finance competencies are increasing each year. Financial literacy is pivotal to building a life of financial confidence. People have an immense appetite to learn. South Africa’s financial services sector has a duty to keep innovating to make education more accessible.”
Just 33% of South Africans did not feel self-conscious talking about money. However, there was a general movement toward more openness around finances. Sanam Naran, Psychometrist, Psychologist, and Featured Expert in the Sanlam FCI, believes this is almost a healing of intergenerational trauma. She says, “The more we can talk about our situations, lived experiences and challenges, the less shame we have and the more we are able to live fulfilling lives.”
Oosthuizen adds that this is the root of Sanlam’s The Dirtiest Word campaign which encourages people to talk about the dreaded ‘F word’ – finances – to be empowered to make better decisions, have stronger relationships, and improve their mental wellbeing.
Dr Mavis Mazhura – Author, International Behavioural Science and Performance Specialist, and Featured Sanlam FCI Expert – says that to address anxiety over the future, people need to go back to the basics.
“Behaviours to feel in control are the fundamentals; go back to basics and do basics well. This includes setting financial goals, budgeting, tracking spending, delaying gratification, and limiting impulse spending, living below your means, having an emergency fund, limiting debt, learning about finances, and seeking professional guidance.”
Oosthuizen concludes that the Index’s purpose is to deep dive into the factors undermining confidence to understand what kinds of interventions will make the most impact. “Sanlam’s DNA is to empower all Africans to be financially confident, secure, and prosperous. We have a real opportunity with Millennials and Gen Zs to change our nation’s narrative. We need shared commitment to meet younger people with the support they’re asking for.”
Download reports
2024 – Download the full Financial Confidence Index report
2023 – Download the full Financial Confidence Index report