In the article “Hungry and Powerless: Households battle to access basic necessities” published on April 23, 2014, Times Live highlighted the enduring struggles faced by households in obtaining essential provisions. The piece featured the daunting challenges families encounter as they contend with keeping up with the cost of living including the huge price of electricity, painting a stark picture of their daily struggles. The trend amongst households across the board is to lean towards debt to get through day to day living. 

The huge problem in motion is that the dependency on debt takes away savings which creates a serious problem into the future. The only way to improve standards of living is to build savings. You cannot create financial freedom without savings. 

The current crisis is eroding  households’ living standards making them poorer over time as rising debt weakens their balance sheets. 

Dependency on state subsidies and grants is a ‘hand out’ which fuels poverty. What is needed is a ‘hand up’’ found in job creation. 

Amongst many options, focusing on building and maintaining infrastructure is a ‘no brainer’ for an ailing economy. Jobs are created as the country is upgraded. The new income boasts taxes which allows for further growth and improvements. More tax in the coffers lessens tax rates which leaves more behind for households.

With the right vision and management, South Africa, with all its resources, can turn the corner and significantly improve the standard of living for everyone. We shouldn’t be struggling with essentials. Instead we should have extras for a better quality of life.

In South Africa, the reality is that our lives are heavily taxed at every turn, raising the question of whether the value derived from these taxes truly enhances our standard of living. Unfortunately, the answer seems to be that the juice isn’t worth the squeeze.

Taxed to death

From the moment we wake up to the time we go to bed, taxes infiltrate our daily routines. Whether it’s turning on the lights, boiling the kettle, using water, wearing clothes, driving a car, buying groceries, or even watching TV, each activity is accompanied by a tax. Even after we pass away, we are subject to estate taxes, illustrating the pervasive nature of taxation throughout our lives.

Do we get value?

While taxes are necessary to fund essential public services and infrastructure, the burden of taxation in South Africa often seems disproportionate to the benefits received. Despite the significant tax contributions made by individuals, the impact on improving our standard of living is frequently called into question.

Tax on tax…..

Adding to the tax trap South African households have additional costs towards private services such as education, medical and security which compensate for the for the poor service delivery of essential service. These extra costs which are also taxed can be seen in themselves as a secondary layer of tax.

Tax is a cost if there’s no delivery

The prevailing sentiment is that the taxes we pay in South Africa do not always translate into tangible enhancements in our quality of life. The current tax system raises concerns about fairness, efficiency, and the overall value proposition for taxpayers, ultimately leaving many to feel that the juice isn’t worth the squeeze.

According to a survey conducted by the National Treasury in 2021, only 51% of South Africans are financially literate, highlighting a significant gap in understanding financial matters. This lack of knowledge poses challenges for individuals in making informed financial decisions and planning for their future.

**Gender Disparities in Financial Literacy**

Women in South Africa face particular challenges when it comes to financial literacy. Studies show that women are less likely than men to have access to formal financial education and often have lower levels of financial literacy. In fact, only 27% of women in South Africa are financially literate compared to 33% of men, according to the same National Treasury survey.

**Closing the Gender Gap in Financial Literacy**

To address the gender gap in financial literacy, targeted programs and initiatives are essential. These programs should focus on providing women with practical knowledge and skills related to budgeting, saving, investing, and debt management. By empowering women with financial education, we can help improve their financial independence and decision-making capabilities.

**The Path Forward**

As South Africa observes National Financial Literacy Month, it is crucial to prioritize efforts to improve financial literacy, especially among women. By investing in financial education programs tailored to the needs of women and promoting financial inclusion, we can work towards a more financially empowered and equitable society for all.

The National Financial Ombudsman (NFO) emerges as a pivotal entity in the financial landscape, designed to bolster consumer protection and streamline dispute resolution processes. Acting as a centralised authority, the NFO oversees various industry ombudsman schemes, ensuring uniformity and efficiency in addressing financial grievances across different sectors.

The primary function of the NFO is to provide a unified platform for resolving disputes between consumers and financial service providers. By simplifying the resolution process and offering a transparent mechanism for redress, the NFO aims to empower consumers and hold financial institutions accountable for their actions.

In practice, the NFO operates as a neutral mediator, investigating complaints, facilitating communication between parties, and striving to achieve fair outcomes. By offering a standardised approach to dispute resolution, the NFO promotes trust, transparency, and fairness within the financial sector, ultimately fostering a more equitable and responsible environment for all stakeholders involved.

The establishment of the NFO signifies a significant step towards enhancing consumer rights and strengthening regulatory oversight in the financial industry, underscoring its crucial role in safeguarding consumer interests and promoting a culture of accountability and integrity.

The concept of identifying the “best” investment is challenging due to the vast array of options, individual situations, objectives, and variables involved. In the Universe of Unit Trusts otherwise known as Mutual Funds there are literally thousands to choose from. Then there are so many options of types of investments structures such as retirement annuities, endowments, preservation funds etc…

– Instead of focusing on finding the absolute best investment, it is more sensible to prioritize selecting investments that are appropriate for individual circumstances, goals, risk tolerance, and time horizon.

– Investment decisions are subjective and influenced by personal factors such as financial goals and risk appetite.

– Predicting the future performance of investments is inherently uncertain, as it requires navigating through a complex web of variables and unknowns.

– Hindsight bias often clouds judgment, making it easier to identify successful investments in hindsight than to predict outcomes accurately in advance.

– The key to successful investing lies in aligning investment choices with one’s unique financial situation and objectives.

– By considering personal circumstances and goals, investors can make informed decisions that increase the likelihood of achieving their financial objectives.