FINANCE FEATURE: Why financial freedom feels out of reach for South Africa’s graduates
Graduating no longer guarantees stability. With stagnant salaries, high living costs, and family obligations, young South Africans are working hard but falling behind.
- “Financial freedom is possible, but it requires discipline, sacrifice, and smart investing,” said Dr Nkunzi
- The cost of living is rising faster than paychecks.
- Internships or entry-level jobs typically pay too little to cover the cost of living.
When Kgomotso Mogale graduated with a biomedicine degree from Eduvos in 2024, she imagined a future in a laboratory or research facility, applying her skills in a field she had dedicated years of study to. Instead, she found herself in sales at a private university, earning just R8000 a month. On paper, it’s a stable job. But in reality, the numbers don’t add up.
Living in Midrand, next to the school she works at, Mogale pays R6000 for rent, leaving only R2000 to stretch across food and other daily needs. By month-end, nothing is left of her salary. Saving for the future is impossible, considering the fact that she also sends her mother money at home.
“I thought getting my degree would mean independence,” Mogale said. “But I can’t even afford the basics. Everything feels too much,” she added.
Dr. Sibulele Nkunzi, lecturer at Wits University’s School of Economics and Finance noted that it is shocking how little internships still pay, with many offering between R5,000 and R8,000.
“That barely covers the cost of a small apartment in Johannesburg,” he explained. What is more concerning, he added, is that this level of pay has hardly changed in 15 years, despite rising living costs. Entry-level salaries should be adjusted for inflation, but companies often point to budget pressures and higher operational costs as reasons for holding back. The result is that graduates in cities like Midrand face unaffordable expenses, sometimes forcing them to drop out of the job market altogether.
For a lot of South African graduates, Mogale’s story is very common. Graduating from university is meant to signal the start of adulthood, but for today’s generation, it often marks the beginning of financial struggle.
Internships or entry-level jobs typically pay too little to cover the cost of living in cities like Johannesburg, Pretoria, and Cape Town. Rent, transport, and food consume almost everything, leaving no room for savings or long-term planning.
Stats SA reports that youth unemployment remains very high, with thousands of graduates across the country struggle to find work in their fields. Many, like Mogale, are forced into roles outside their area of study simply to survive.
Even people who have jobs are earning less in reality, because prices keep going up while their salaries stay the same. According to the BankservAfrica Take-Home Pay Index, real salaries in South Africa have barely grown over the past five years. That means even when graduates earn more on paper, their money stretches less every month.
“The cost of living is rising faster than paychecks,” says Johannesburg-based financial educator Ona Selepe. “Young professionals are earning, but they’re not getting ahead. Most can’t save, and many turn to debt just to stay afloat,” she said.
In Mogale’s case, small things like catching a taxi to go buy groceries drain her budget. “By the time I pay for taxis and groceries, I’m in the red. I’m not even thinking about things like medical aid or investments. I simply can’t afford them,” she said.
Beyond rising costs, there’s another layer of pressure unique to many South Africans: “black tax.” Graduates who are the first in their families to secure jobs often feel obligated to support parents or siblings financially, even when they themselves are struggling.
Human resources consultant Mummy Seriti says this expectation places young workers in impossible positions. “They’re expected to live up to the image of success, the car, the good suburb, but the money simply isn’t there to sustain that lifestyle.”
For Mogale, the thought of helping family members is overwhelming. “I want to support them, but how can I when I can barely support myself?”
Dr.Nkunzi explained how inflation is hitting new graduates especially hard. “The high cost of living makes it difficult for graduates to cope, particularly those starting out in low-pay internships,” he said. “Most of their income goes straight to rent, transport, and groceries, leaving little for basics like electricity, internet, or even toiletries.
“Without parental support, many are forced to stretch limited pay to survive. This constant financial pressure doesn’t just reduce quality of life, it also harms mental health, work performance, and relationships,” he added.
Dr. Nkunzi emphasised that financial literacy is crucial for young graduates trying to make the most of their limited income. “The truth is, many people only learn about money after making costly mistakes,” he said. Being proactive, learning how to budget, avoiding unnecessary debt, and starting early, can make a significant difference.
He stressed that financial freedom is possible, but it requires discipline, sacrifice, and smart investing. Graduates may also need to explore alternative income streams, which are increasingly available through technology and the gig economy, to ease pressure and begin building a more secure financial future.
Mogale’s journey reflects a generation caught between ambition and survival, a reminder that until conditions change, financial freedom will remain out of reach for too many graduates.
FEATURED IMAGE: Monthly Salary vs Expenses. Graph: Dikeledi, Canva
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