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The impact of financial literacy on savings in South Africa

Author

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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)

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

Suggested Citation

  • Cecile Duvenhage & Nico Keyser & Lentsho Moepi, 2025. "The impact of financial literacy on savings in South Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 14(5), pages 222-229, July.
    • Handle: RePEc:rbs:ijbrss:v:14:y:2025:i:5:p:222-229
    DOI: 10.20525/ijrbs.v14i5.3985
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