Saving in one’s 20s can help secure their financial future.
AS SOUTH AFRICA trudges through a technical recession, young people in their 20s should be warier of how they save and spend their money.
Saving in one’s 20s can assist with the development of one’s financial future.
Financial advisor and wealth planner from Discovery, Kyla Elsey, told Wits Vuvuzela, “It is crucial to start saving as soon as you can, although it might be difficult to do so in your 20s. Saving for the next 10 years could possibly be more powerful than saving for the next four decades combined.”
The 25-year-old graduate from Wits said that she was oblivious to saving when she was a student.
“I never had any interest on learning how to save as I chose not to understand the power of saving. Looking back, I should have started saving at the age of 20. Even if it meant I could only put away R150 every month it would mean that 5 years later I would have had a decent sum of money building up in today’s time.”
Dr Yudhvir Seetharam from the School of Economics and Business Sciences at Wits said students need to learn to save as soon as possible as this will help them transition into working life easier and help them manage their future lifestyle changes better.
“For most students, living expenses are relatively low while studying. Thus, whatever income you get by doing part time jobs should be saved to help you buy your first car or even rent out your first apartment,” Seetharam added.
Second-year BCom accounting and cooperate finance and investment student, Munya Munyurwa, believes all students should save and added that even the little things one purchases everyday adds up to unnoticeable amounts. He is approaching his 20s and said saving will assist him and others like him in their future.
The 19-year-old told Wits Vuvuzela, “There’s a lot of ‘uncertainty’ for some students about future job market when leaving varsity. So I think saving, if possible, in our early 20’s will be incredibly important for our own financial security in the future.”
“Saving doesn’t necessarily have to be long-term it could be short-term; people can save up for events they want to go to or things they want to buy. Saving at this age is important because sacrifices have to be made in order to save and that in turn could help teach people many lessons,” Munyurwa said.
Students have many different options for saving such as the standard method of savings accounts at banks as well as the riskier but rewarding option of investing into the stock market.
Seetharam said, “Typically, you want to follow an approach where you save the most in savings or investment accounts, offered by any bank followed by investing in exchange traded funds (ETFs).
“ETFs offer you the chance of investing in the stock market, without the hassle of keeping alert on what’s happening each day. ETFs are generally low risk investments, that can help you get exposed to the world of investing.”
Elsey agrees, “Stock market funds have steady and consecutive growth, so while your money is protected against any downside movements in the market, you have upside potential and in relation to the growth you can accumulate your money.”