Economically times are tough, and most people are expected to tighten their financial belts.
Statistics South Africa (StatsSA) recently announced that the economy has re-entered decline during the first quarter of 2024.
With the curtain almost coming down on Youth Month People’s Post spoke to Debt Rescue who shared some helpful tips for young people on how to be money-wise.
As a student managing a low income can be straining, but Annaline van der Poel, chief legal officer for Debt Rescue, said by being disciplined and resourceful, students can manage their finances effectively, and minimise financial stress.
“It’s crucial to prioritise and plan carefully. Start by creating a detailed budget that includes all income and expenses and stick to it. Focus on essential expenses. Most importantly, avoid unnecessary debt by using credit cards sparingly.”
Tips for students
- Create a budget: Track your income and expenses to identify where you can cut costs.
- Cook at home: Preparing meals at home is cheaper and healthier than eating out.
- Use student discounts: Take advantage of discounts on food, clothing, entertainment, and transportation.
- Buy used textbooks: Purchase used textbooks instead of buying new ones, where possible.
- Limit entertainment expenses: Look for free or low-cost activities on campus and in your community.
- Avoid unnecessary debt: Use credit cards sparingly and only for emergencies.
- Find part-time work: Look for flexible job opportunities that fit your schedule.
- Utilize campus resources: Take advantage of free services like gyms, libraries and events.
First-time employee
Van der Poel advises that the first-time employee manage their salary wisely.
“The freedom of a salary for the first time is very liberating, but also the perfect time to learn how to set goals and create good habits for the rest of your life.”
Do’s:
- Create a budget: Outline your income and expenses to track your spending and save effectively.
Don’ts:
- Avoid impulse buying: Think twice before making unnecessary purchases.
Tips for children
According to Van der Poel, parents can start teaching their children about saving as early as preschool age.
She explained that introducing financial concepts early fosters good habits, reduces future financial stress, and empowers children with financial literacy. “Simple activities like counting coins, saving in a piggy bank, and setting small goals can lay a strong foundation.”
Van der Poel said parents should lead by example. “Use real-life scenarios, and leverage technology to make learning about money engaging. Include children in shopping outings, teaching them how to bargain hunt or find the items you identified that are on special and on your shopping list.”
- Take advantage of compound interest by starting as soon as possible.
- Set clear financial goals: Determine short-term and long-term financial goals, such as buying a car, furthering education, or saving for a down payment on a house.
- Educate yourself: Learn about personal finance through books, online courses, or financial workshops. Understanding basics like budgeting, investing, and taxes is invaluable.
- Live within your means: Avoid living beyond your financial capabilities. It’s important to differentiate between wants and needs to maintain financial health.
- Build a good credit score: Use credit responsibly to build a good credit score, which is crucial for future financial opportunities like buying a house or car.
- Save for retirement: Start contributing to a retirement fund, even if it seems far away. The sooner you start, the better.
- Avoid unnecessary debt: Be cautious with credit cards and loans. Only borrow what you can afford to pay back and always make payments on time.
- Track your spending: Regularly monitor your expenses to identify areas where you can cut back and save more.
