/ 29 August 2023

Being money savvy when young can contribute to a financially secure future

Pexels William Fortunato 6140412

 Five financial blindspots to steer clear of

When speaking to people in South Africa, the feeling is that the task of saving has been positioned as a sacrifice, which entails sacrificing some things people genuinely enjoy. The reality is that if we instil a culture of saving within Mzansi by changing the traditional savings approach, savings then doesn’t have to come across as a grudge sacrifice. Last year Metropolitan launched a savings campaign dubbed Sisonke in Savings, which took to the streets to find out how ordinary South Africans tackle savings in very unconventional ways. 

This campaign — a first of its kind — indicated that South Africans have a saving culture that sees them starting small, and making small changes. For example, those who enjoy hitting the malls for some retail therapy spoke on how they didn’t have to cut shopping out completely but went shopping in the sale section to save money, which is more realistic than most advice given to consumers where savings is concerned.

Another secret to saving in addition to making small changes that can have a big impact on your life, is starting as early as possible. Our youth is all about new life experiences, adjusting to a lot of new things and growing up. Earning your first salary, moving out of your parent’s house, becoming independent and paying your own bills. Adjusting to adult life can be both invigorating and overwhelming. While it is never too late to take control of your finances, the younger you start, the better your chances of fast-tracking your way to financial success. To help you stay the course, Tlalane Ntuli, Chief Marketing Officer at Metropolitan, shares five well-known financial blindspots to steer clear of.

Not setting a budget

There are many upsides to being young. One of the biggest is that you probably have more disposable income than you could ever have dreamed of, as you might not have a bucket of serious responsibilities. The problem is that you may not keep track of your spending. It is okay to indulge, but your finances may take a hit without moderation. 

Take the time to set a budget. Your 20s and 30s are an ideal time to build your emergency savings and start investing in your financial success. Remember, you don’t have to completely deprive yourself. Your goal should be to live within your means and make a few tweaks so that you can invest in your future. You will be amazed at how talking to your peers can help you find easy ways to save, that don’t feel like you have to sacrifice a life you deserve and enjoy. It is all about making small adjustments that will see you win in the long term.

Not saving

You should be saving. If you’re spending everything you’re making, it’s time for either a readjustment of your choices, or your attitude. Remember that saving doesn’t have to be difficult  — it can be small changes that you make, like being part of a lift club to save on petrol, purchasing clothes when they are on sale or something as simple as taking a packed lunch instead of buying lunch every day when at work. Take a different view on savings and investigate where you can make changes that can assist you in saving. It is also important to remember that taking out risk cover such as a funeral plan and life cover can help you save in the future as this cover will assist you when life happens, and you have the benefit of not having to dig into your already stretched pocket to fund some of life’s eventualities and unforeseen circumstances.

Not preparing for a life change

Thinking about and preparing for financial obstacles can help you avoid later heartache. A steady salary today does not guarantee one in the future.  What if you get sick? Or something happens that needs a rainy-day fund? All these things are important to consider. Unexpected expenses are bound to come up, but with a little forethought, you’ll be ready. 

Remember, though, not to worry yourself sick over things that likely won’t come to fruition. Ideally, having some extra money set aside provides you security and peace of mind so that you’re not overcome with financial anxiety. Your 20s and 30s are an excellent time to consider what life changes could happen throughout the next several years and how they could affect your finances.

Feeling uncomfortable to talk about money

Most people grow up being told that talking about money is impolite. However, it is important to have money conversations with your collective and not function in a financial silo. Having the money conversations allows you to manage expectations and set some money values in place. While the final say in how you use your money and how you prioritise is yours, having money conversations can assist you, especially when you are considering decisions that can have a huge impact on your finances.

Failing to plan

A good financial plan is absolutely necessary to maximise your income, help you become smart with your money and avoid unnecessary financial hurdles. Again, you don’t have to feel fearful about having a financial plan. If you don’t know where to start, you may want to consult a registered financial advisor to help you craft a plan that will see you flourish financially.

For more information check out www.metropolitan.co.za or follow the official social media pages:

Facebook: MetropolitanZA

Twitter: @MetropolitanZA

LinkedIn: Metropolitan

Instagram: metropolitan_za