Young South Africans Struggle with Finances Amid Record-High Youth Unemployment
- Young South Africans are experiencing tougher financial pressures than generations before them
- Many young workers feel their income hardly stretches beyond basic living expenses, leaving them under intense financial pressure
- Social and online influences, from friends, family, and digital trends, often intensify the pressure on young people to spend
- Victor Bucarizza, Executive Partner at GIB Private Clients, shared some insights on how to save money
Many young South Africans are struggling financially, facing tougher economic realities than those before them. With youth unemployment sitting at 62.4% among 18 to 24-year-olds, saving has become more of a luxury than a routine part of life.
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Facing financial pressure
According to the latest Standard Bank Youth Barometer, young South Africans are facing immense financial pressure, with many saying their earnings hardly stretch beyond necessities. For most, daily survival takes precedence over saving or investing, while others feel overwhelmed by uncertainty and the stigma of financial struggle.
Victor Bucarizza, Executive Partner at GIB Private Clients, noted that emotional barriers are a major, but often overlooked, factor in financial decision-making among young people. He explained that many experience what he calls “money shame,” a feeling of being behind before even starting, which discourages them from engaging with their finances. He added that the best way to overcome this fear is to start taking small, practical steps early.
Bucarizza said a key step is changing how young people think about money. He explained that earning an income should not only be seen as a way to cover expenses but also as a means to build purpose, contribute to one’s community, and invest in the future. He added that one of the most overlooked uses of income is purchasing assets, investments that generate ongoing returns without requiring continuous work.
Long-term financial security
He explained that for young people starting their careers, the focus should be on increasing their earning potential and setting up automatic contributions toward investments from the very beginning. Developing this habit early allows wealth to grow over time and makes long-term financial security far more attainable.
Bucarizza acknowledged that tight budgets and rising living costs make it hard for young people to take that initial step. He said the key challenge is balancing day-to-day needs with long-term planning, which is why setting small, achievable financial goals is crucial. Even minor successes can boost confidence, and there’s no need to completely overhaul finances at once; starting with manageable automated contributions is enough.
Culture of spending under social pressure
Bucarizza said that social and online influences often intensify spending pressure on young people. He refers to this as “peer-modelling,” where individuals adopt the spending habits of those around them. When peers are consistently spending, it can feel natural to follow suit, sometimes subconsciously, as a way to project success.
Bucarizza noted that social influence can have a positive effect as well. The same forces that encourage overspending can be redirected toward saving and investing. He suggested that rather than isolating young people from their social networks, financial habits could be reinforced through them, envisioning a scenario where saving becomes a normal and aspirational topic among friends, families, and schools.
Financial stress often compounds over time. According to a recent survey, 70% of South Africans think about money daily, highlighting how many young adults remain trapped in a cycle of working to get by rather than planning for long-term wealth. Many rely on short-term solutions, such as credit or buy-now-pay-later schemes, which can worsen their debt.
He suggested that avoiding debt often starts with understanding one’s financial landscape and recognising where adjustments can be made. By getting a sense of necessary expenses and weighing them against personal priorities, individuals can decide where to direct their resources and where to ease back.
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Small savings, big difference
Bucarizza acknowledged that advice to “save 20% of your income” can feel out of reach for those barely covering basic expenses. He suggested starting with what is manageable, even if it’s a small amount, emphasising that setting aside a portion of any income and tracking spending through budgeting are practical first steps.
A savings account can serve as an easy starting point, with most South African banks offering products that require low minimum deposits and provide reasonable interest rates. For those ready to go further, RSA Retail Bonds offer a government-backed medium-term savings option, while digital investment platforms enable small, low-cost investments. Community-based savings schemes, such as stokvels, also provide a valuable path to financial stability, particularly for individuals with irregular incomes.
Bucarizza noted that many South Africans could benefit from reshaping their relationship with money. By keeping spending below earnings and channelling the remainder into assets, individuals can gradually build self-sufficiency. Over time, a generation that embraces this approach could move away from dependency and achieve greater financial stability.
He also emphasised that financial literacy should be introduced early, taught practically in schools, and reinforced at home. With World Savings Day approaching, he suggested the focus should be on consistent saving rather than perfection.
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Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of Briefly News.
Source: Briefly News
