Durban - Members of generation Z who live with their parents may have seen how their elders suffered financially during the pandemic.
While other young people who just became independent may have felt the financial impact of Covid-19 too.
Thus many have changed their perspective towards saving and planning for the future.
It is important for young people to start saving from as early as possible to achieve their financial goals. It will also teach them about financial discipline and committed to staying on track.
Motlatsi Mkalala, head of Main Market at Standard Bank, shares seven tips to help people reach their financial goals.
Save your money before you spend it
Put aside a portion of the money you received before you spend it, whether it’s your allowance, income from your job or a gift. This will prevent you from spending all of your money including the money meant for your savings.
Open an interest-bearing savings or cheque account
Opening an interest-bearing savings or cheque account will keep young people motivated to save. This will give them an out-of-sight place to put their savings and give them the opportunity to learn about the effect of interest.
Speak to your parents about matching your savings
Young people who are under 18 or still studying can ask their parents to match their savings or at least half of it if they belong to a middle-class or affluent household.
Have a set of goals
Setting goals will make the process of saving much easier because you will know what you are saving your money towards. It will also prevent you from being tempted to spend your money unnecessarily.
Track your spending
The smart way to save money is to keep track of it. Young people can track their spending using a spreadsheet or an app. It will give you an idea of where their money is going and what needs to be cut back on.
Give yourself an allowance
If you have a side hustle or part-time job, pay all of the earnings straight into the account meant for saving. Doing this will stop you from being tempted to spend your money but instead cultivate financial discipline.
Instill delayed gratification in yourself
Delayed gratification is a person’s ability to resist an instant reward so that they can get a more valuable reward in the future.
You can teach yourself delayed gratification by making a list of your financial priorities over the next one to three years. Then create a plan to save enough money to take care of each of them.
Starting the journey of saving at a young age will empower you in the short-term and bring you many long-term benefits.
“Don’t be deterred if you are only saving a small amount to begin with, the magic of compound interest means that when you start early even modest amounts grow into large sums,” Mkalala said.
IOL Business