HEALTHY FINANCIAL HABITS FOR MILLENNIALS
LOOKING back at her teenage years, Happy Ngale, a financial well-being consultant at Alexander Forbes Financial Planning Consultants, shares with today’s Millennials some of the rands-and-cents advice she would have given herself.
• Learn how to budget. “Getting into the habit of healthy money management early is key. The pocket money from my parents could have been a great start in terms of learning how to manage my finances. This would have prepared me for when I started working and earning a salary, because if the habit of good money management is built from a young age, it is easier to apply these principles when one starts to earn larger amounts.”
• Avoid spending money on things you cannot afford. Teenagers experience peer pressure, which means wanting what your friends have. But the lesson to be learnt is: if I can afford what my friend has. If I can’t, I have to learn to wait until I can afford it.”
• Start a savings account. “I would recommend that teenagers open a bank account with a savings feature, as this teaches you to start putting some money aside. We need to embrace the concept of saving from a young age, to learn the gratitude which goes into earning interest and being able to buy what we want for ourselves.”
Ngale said the Millennial (Generation Y) mindset differed from those before them, namely the Generation Xers and the Baby Boomers, because Millennials “prefer to earn their money to spend it now. If they want to buy an item now, they will make a plan to have it, whether they can afford it or not”. Baby Boomers on the other hand, tend to buy on loan and develop a payment plan. “They spend most of their working life paying off debt.” Gen Xers are very conservative with their spending and prefer to save.
“Millennials strategise their spending. They are usually committed to getting what they want and will earn that extra cash to buy what they want. Millennials are not lazy to take on an extra job to fund the sports car they want.” – Staff Reporter