South Africa is producing more graduates than ever before. But as young people enter the world of work, many are facing another challenge for which their degrees may not have prepared them: managing money.
At March 2025, South Africa had 28.9 million credit-active consumers, of whom 10.4 million – or 36% – had impaired credit records. At the same time, national financial literacy scores, measured using the OECD’s standard instrument, declined from 55 out of 100 in 2015 to 51 in 2023.
These figures are often discussed separately. They should not be.
A growing graduate population does not automatically translate into a financially capable one. A university degree can demonstrate competence in a particular field without guaranteeing that a graduate understands credit, debt, saving, budgeting, investing or financial risk.
The question South Africa needs to ask is therefore not simply whether our graduates are ready for work, but whether they are ready for the financial realities that come with earning an income.
The financial education gap starts at university
For many students, university is the first time they manage money independently.
This is particularly significant for students receiving financial support through the National Student Financial Aid Scheme (NSFAS). In 2026, more than 1.2 million students were approved for NSFAS funding and allowances covering expenses such as accommodation, transport, food and learning materials.
For many young people, this represents their first regular flow of money in their own name – at precisely the stage when they are also gaining access to retail credit, buy-now-pay-later products and increasingly sophisticated financial marketing.
Yet financial capability is often treated as something students will simply acquire with age.
They will learn when they earn their first salary. They will understand credit when they finance their first car. They will learn about investing when they start saving.
The problem is that these lessons can be expensive.
A poor financial decision at 22 can affect access to housing finance years later. An unnecessary debt commitment can consume future income. An investment scam can erase savings accumulated over years.
Experience is a powerful teacher, but financial mistakes do not have to be the classroom.
When academic success does not equal financial capability
The gap is not necessarily the result of universities failing to care about student wellbeing. It is largely structural.
Higher education institutions are measured through indicators such as enrolment, graduate throughput and research outputs. Financial capability after graduation is rarely captured in the same way.
As a result, two students can leave university with identical qualifications and both be counted as successful graduates, even if one understands how to budget, manage debt and build financial resilience while the other does not.
This creates an institutional gap.
Student affairs structures often have direct access to students but limited curriculum authority. Faculties have curriculum authority but generally lack a mandate to provide financial education across programmes.
Financial literacy can therefore become dependent on individual champions, occasional initiatives or external funding.
The evidence increasingly suggests that financial education can produce measurable improvements. The challenge is no longer simply demonstrating that it can work. The bigger question is whether institutions are prepared to make it part of the student experience.
From financial theory to real-life decisions
North-West University’s Money Moves – University Students’ Money Matters workshop offers one practical example.
Developed as part of the Money Smart Week South Africa Campaign developed by National Treasury, the workshop was designed around everyday financial decisions rather than abstract financial concepts.
Students worked with realistic budgets, distinguishing between needs and wants while seeing how one decision could affect the choices available later.
Scenario-based activities demonstrated how seemingly small differences in spending and saving can compound over time. The programme was structured around four practical functions:
- Earn it
- Manage it
- Protect it
- Grow it
The approach gives students an opportunity to rehearse financial decisions before the consequences become real.
Prof Suné Ferreira-Schenk, who led the collaboration, describes this as an opportunity for students to make mistakes that cost nothing – rather than learning the terms of a credit agreement only after signing it.
One student’s reflection captured the principle particularly well:
“Saving is a habit that has to be developed before investing is possible.”
The strong student response to the workshop points to both demand and need for financial education that connects directly with students’ everyday realities.
Financial capability should become part of the university experience
If South Africa wants graduates to be genuinely prepared for life beyond university, financial literacy should not remain an optional extracurricular activity.
At minimum, universities could make practical financial capability part of the first-year experience.
Students could be taught how to:
- Build and manage a realistic monthly budget
- Read and understand a payslip
- Distinguish between good and harmful debt
- Interpret credit agreements
- Build an emergency fund
- Understand interest and the long-term cost of borrowing
- Recognise financial scams
- Start saving before investing
- Understand basic retirement planning
- Make informed financial decisions when entering the workplace
Where public funding provides students with financial support, there is an especially strong case for pairing that support with the skills needed to manage it effectively.
Employers also have a role to play
The responsibility does not end at the university gates.
Financial stress can follow graduates into the workplace, affecting everything from payroll administration and absenteeism to early retirement withdrawals and employee retention.
Employers already invest significantly in education through bursaries, graduate programmes and corporate social investment. Supporting financial capability earlier in the education-to-employment journey could help young employees build stronger financial foundations before financial problems become workplace problems.
Preparing graduates for more than a job
South Africa has made significant investments in expanding access to higher education and preparing young people for participation in the economy.
But being employable and being financially capable are not the same thing.
A degree can open the door to a first job and a first salary. What happens to that salary afterwards depends on skills that are rarely listed on a university transcript.
Financial literacy should therefore be viewed not as an optional life skill, but as part of preparing young people for adulthood, work and economic participation.
We have become better at preparing graduates to earn. Now we need to become equally serious about preparing them to manage, protect and grow what they earn.
