Young South Africans like to follow the latest fashion, beauty and music trends. It’s this instant gratification that hinders their potential to spend their money wisely and save for their future.
Charles Mpofu, Consumer Financial Education Manager at Nedbank, says that with a little bit of discipline and ambition, it can be easy for young people to save and plan for their future.
“The most important thing is for a person to have a savings goal. Ask yourself why do you want to save?” he says. “Young people don’t struggle to set goals, they struggle to stick to their goals because they want instant gratification.”
Charles encourages young people to adopt a “SMART” attitude towards saving. This acronym stands for:
S = Specific. Define your goal and know exactly what you want to achieve
M = Measurable. Measure your progress because it will keep you motivated
A= Achievable. Make sure your goals are within reach
R= Realistic. Set realistic goals that you can accomplish
T= Timely. It’s important to have a time frame in which to achieve your goals.
Charles explains that a lot of young people go to a bank and open a savings or cheque account, without knowing that each bank has a facility that is designed specifically for their age.
“A savings account does not need a card because you should only be able to access the money when you go to your branch to withdraw it. There are different types of accounts that have different features. Accounts for young people should not have monthly fees because they often do not have a steady income, and are not working.”
Here are Charles’ nine tips to help young people save:
Make saving for your future a priority.
Have a plan for saving that is part of your monthly budget and stick to it.
3. Start small
Don’t try to save a lot of money in a short space of time, start saving from as little as possible which can be R50 – R100
4. Skip the snacks
Don’t buy on impulse, take the money you would have used for a snack or cool drink and save it. If you’re thirsty drink water or have a meal at home.
5. Don't get tempted
Hide your credit cards, don’t carry them with you until you are in a better financial position. If it’s in your pocket you’ll use it when it’s not necessary.
6. Gift a service
Give a gift of service such as painting a house, washing cars or babysitting instead of saying you’ll buy things for people.
7. Say "bye-bye" to brands
Buy cheaper brands of your favourite products.
8. Quit bad habits
Avoid expensive habits such as smoking and drinking alcohol
9. Keep going!
Never give up. It might be difficult when you start, but it will be worth it when you achieve your goal.