The impact of financial literacy on savings in South Africa

Cecile Duvenhage, Nico Keyser and Lentsho Moepi
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Cecile Duvenhage: University of the Free State
Nico Keyser: University of the Free State
Lentsho Moepi: University of the Free State

International Journal of Research in Business and Social Science (2147-4478), 2025, vol. 14, issue 5, 222-229

Abstract: The study investigates the relationship between financial literacy and savings among individuals in South Africa, utilising data from the National Income Dynamics Study. The theoretical framework highlights the importance of financial literacy, encompassing knowledge, behaviour, and attitudes towards financial planning. Empirical analysis using OLS, Logit, Probit, and Tobit models reveals a positive correlation between financial literacy and savings. Higher financial literacy levels are associated with increased savings propensity, with significant coefficients observed across various models. The findings underscore the critical role of financial education in enhancing savings behaviour, suggesting that improved financial literacy can lead to better financial outcomes and contribute to economic growth. The study’s results have policy implications, advocating for targeted financial literacy programmes to boost savings rates and support economic development in South Africa. Key Words:Financial Literacy, Behaviour, Economics, Saving, Growth, Education

Date: 2025
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