Instead of splurging on luxury brands, young adults are buying homes and cars while carefully balancing their budgets
South Africa’s young adults make bold yet careful financial decisions and not splurging on luxury brands on credit, as they are often stereotyped as doing, Standard Bank’s inaugural Youth Barometer Report has noted.
The study, which drew on insights from Standard Bank’s personal and private banking divisions as well as from insurance data from Liberty, showed how the bank’s three million clients aged 18 to 35, from 2023 to 2025, allocated income between essentials and discretionary spending, while managing home loans, vehicle finance and insurance.
According to the barometer, more than 15% of youth in Standard Bank’s credit card customer base earned just over R50,000 a month, while 36% earned less than R5,000 and 43% earned R10,000 or less, signalling significant income diversity in the demographic.
“Our research shows … young people are making intentional, informed choices in how they spend, borrow and save,” said Tshiamo Molanda, the head of youth and mass market segments at Standard Bank.
“From saving for their first home to budgeting for reliable transportation — often through second-hand cars — and ensuring their extended families are protected with funeral cover, this generation is making thoughtful trade-offs with intent and maturity.”
The study found that people aged 18 to 24 allocated the highest share of their income to essentials (58%), focusing on groceries, transport and housing, clothing, healthcare and education.
This group also showed a strong affinity for fast food takeaways, spending the highest proportion on dining out compared to older youth segments. Fitness and self-care spending on items such as clothing was nearly double that of the 30 to 35 age group, reflecting their prioritisation of wellness.
“This tells us that younger age-groups have a higher brand affinity to luxury brands,” Shené Mothilal, a digital money manager at Standard Bank said.
Popular clothing destinations for this group included Mr Price, Pep, Ackermans, Shein, H&M and luxury outlets such as Farfetch, Louis Vuitton and Timberland.
The 25 to 29 age group spent 53% of their income on essentials, with groceries, digital connectivity and clothing still featuring prominently. But spending on insurance and loan repayments was higher for this group, indicating growing financial maturity and credit record building.
Although their fast food spending remained high — second only to the 18 to 24 group — this age group reflected a slight decline in discretionary spending on eating out and entertainment. But they spent more on fashion, favouring brands such as Foschini, Shein and Markham.
By the time they reached 30 to 35, young adults showed an even split between essentials and discretionary spending (49:51) according to the barometer.
They dedicated the highest proportion of their income to insurance compared with the other groups, nearly double that of the youngest segment, and also allocated significant funds to loan repayments, especially for those earning R10,000 to R20,000 a month.
Clothing spend declined compared to younger groups, with this age group favouring affordable and mid-range brands such as Pep, Ackermans, and Mr Price. Their spending on travel and entertainment was also the lowest of the segments.
Credit card penetration among under-35s remained relatively low, accounting for just 16% of Standard Bank’s credit card base. The youngest group comprised only 1% of cardholders, reflecting lower incomes and cautious credit use.
“Many under-35s use their cards primarily for daily essentials like groceries and personal care, as well as transport and dining out,” said Tumelo Ramugondo, head of credit cards at Standard Bank.
He said customers in the 18 to 24 age group were also conscious of interest charges and made on average three repayments to their cards a month.
Ramugondo added that young adults were also increasingly adopting Buy Now, Pay Later (BNPL) credit services, with purchases doubling from R102 million in 2023 to R200 million in 2024.
“This group is getting smarter about using credit cards to benefit from rewards and to access additional liquidity, especially when repayments are made within the 55-day interest-free period,” Ramugondo said.
According to the barometer, homeownership aspirations were strong across all youth groups.
From January 2023 to April 2025, 74% of all new home loan applications were from first-time homebuyers, with youth accounting for about 40% of new home loan inquiries. The average home loan granted was R1.2 million, with 70% approved for a term of 20 years.
“Youth are aspirational and determined to enter the property market. For many, owning a home represents both stability and a long-term investment, even if they have to stretch affordability to get there,” Toni Anderson, head of home services at Standard Bank said.
Young people made up 37.7% of Standard Bank’s vehicle finance customers with 65.1% financing their cars without a deposit and 41.4% opting for balloon payments. A significant 73% opt for pre-owned vehicles, with Volkswagen, Toyota and Suzuki leading the pack.
Insurance funeral cover, which often covered extended family, was the most popular insurance product among under-35s, with the youth, mostly women, comprising 26% of all policy holders.
But life insurance lagged, with only 16% of under-35s holding policies, reflecting lower affordability thresholds, immediate cultural priorities and a tendency to prioritise shorter-term risk mitigation over longer term planning.