Living independently is making older millennials money-wise

YOUNG South Africans who have left home to live independently may be financially strapped, but they are resourceful enough to rise above it, according to the 2018 Old Mutual Savings & Investment Monitor.

An online supplementary survey focused on the financial behaviours and attitudes of a sub-segment of millennials: working individuals aged 18 to 35 who are “recently independent but financially strapped” (known as Rifs).

According to the survey, one in three Rifs holds down more than one job to boost his or her income, and four out of five are sharing accommodation.

What’s more, most (63%) say they are saving and investing. Funeral policies (66%) and life cover (65%) head the list of financial products. Thinking long term is a priority: nearly half have some form of banked cash savings and/or a retirement annuity, while nearly one in five have invested in shares and/or unit trusts.

The reasons for saving range from wanting to buy a home to saving for unforeseen expenses or to upgrade their lifestyle.

Lynette Nicholson, the research manager at Old Mutual, says: “Leaving home in a tough economic climate has become a significant challenge for young adults, and for half of them it’s more feasible to continue living at home.

“Those who have been able to launch themselves are, on average, 29 years old (older millennials) and earning in the region of R19 000 a month. About 72% have some postmatric qualification and 88% own a car. But it’s not all plain sailing. At least 17% continue to depend on their parents financially, and nearly half have boomeranged and moved out more than once.”

The cost of petrol and transport is the biggest expense facing Rifs, after they’ve paid their rent or home loan. This is followed by groceries, electricity and medical expenses.

Rifs are well connected, with

79% owning a laptop, 77% having more than one cellphone and 65% equipped with an internet router.

A positive by-product of independence, the survey suggests, is that moving out of home has made Rifs more conscious of their eating habits (67%) and has made them recycle more (48%).

Nicholson believes the responsible attitude of Rifs is helping to drive a trend away from indebtedness and impulsive spending towards a more cautious, money-wise approach.

“It bodes well for the future. Building a strong national savings culture is a priority for South Africa.”