What a pity, you work hard to get educated and then you build up debt! It used to be that a good education was a ticket to financial freedom but NOT so any longer. Young, educated people are drowning in debt. Generation Y aka Millenials born between 1981 and 1998 – aged 20 to 37 are well educated and living well above their means
Let’s give you some stats to show that the Future of SA is very bleak – our youth are the future!
- Youth unemployment in SA is over 52% – that is ~3,8 million people aged between 15 and 34 years who are unemployed
- They account for 63% of the total 27% (6 million) unemployed
- The OM Survey shows that 64% of millenials have a personal loan compared to 14% among older generations and 35% vs. 13% of their income was spent on servicing the interest on debt
- Millenials comprise 40% of SA’s working force and they are not saving much for retirement, or anything else
What are they spending their money on?
The survey indicates that they are travelling, buying cars – on balloon I might add, appliances, etc…
Who or what is to blame for this state of affairs?
- Low levels of financial literacy with some not even understanding the difference between saving and investing – still NO comprehensive financial literacy as part of the school curriculum. Their ignorance is someone else’s profit
- Many would shy away from pointing this fact out – banks are partly to blame for putting the young, educated people in debt – banks should be charged for reckless lending as defined in the National Credit Act for selling credit cards and other debts to university students, how can you give debt to someone who is still a student? The credit profiling system that requires young people to take on debt they don’t need to be able to get debt they need is also responsible for this sad state of affairs
- Poor parenting – as parents, we must teach our children about money. Even if we don’t know much about money, it is enough to tell them NOT to get into debt and to save money.
Why ThuthukaSA’s youth are bound to be financially free
Due to the talks I do at some universities and social media posts, we have quite a number of young people in our books as our customers. We encourage them to take the starter pack for young graduates which is:
- Life cover of about R300 – because death does come at a young age sometimes and also, because it is cheaper to take life cover while you are young
- Retirement Annuity starting at R300 – because we know they will be job hopping and not preserving their pension, the few that have employee benefits, when they change job
- Tax-free investment of R500 – so that they start investing money for their long term needs e.g. legal fees for their first home, deposit for a car, lobola, etc…
Generally, those who have read the book From Debt to Riches or our blog posts or have attended our talks are eager to start out on the right path. This shows that financial education of our young people is critical to give them and our country a better future.
So if you want to give yourself a financial head start, drop us an email at firstname.lastname@example.org