There's a reason you're in the industry you are in: You want to make an impact. You want to see change. You want our young people to succeed.
To see change, we need to ensure we are giving young South Africans the best opportunities to thrive. We need to build a future of secure, financially savvy members of society. This change is central to achieving genuine social impact and directly aligns with the UN’s Sustainable Development Goals that strive for poverty reduction, quality education, and reduced inequality.
Think back to when you were younger. What financial education were you exposed to? What mistakes did you make?
Reflecting on this while writing the article, we had to admit that we never had much in the way of financial education. And this meant we had to learn the hard way – from our mistakes.
These are the mistakes we need to teach our youth to avoid. Mistakes, even though made out of ignorance or the innocence of youth, may emotionally impact young adults in an adverse way - this is concerning as the financial stress on them is real, and it is crushing them.
And here's the reality: THEY ARE TOO EMBARRASSED TO ASK FOR HELP!
Secrecy, coupled with financial apathy, is simply making the problem worse. Costs are soaring, and young people are feeling the pressure. How can they thrive with limited income under these circumstances?
Our youth do not have the financial foundation and confidence they need. And we need to change this fast.
At WaFunda, we provide financial education to young South Africans. Our work is focused on ensuring that young people are educated, supported, nurtured, and empowered to become contributing members of society. We are are proud to deliver Blackbullion South Africa - an award-winning inclusive financial literacy and wellness platform used by over a million young people worldwide.
Being on the ground, working with young people daily, we see the pressure they are under. Here are some of the issues they have to deal with right now:
Black tax
For many of our young people getting a job doesn't mean they will earn an income that will support their lifestyle or allow them to invest in their future. Their salary or stipend is often needed to support their family members.
There is pressure from family members for them to be providers, sometimes at a high cost to their wellbeing.
A 2020 research study conducted by Feenix showed that graduates – 95% of which were young black adults – had the most pressure to support their families financially. The research showed that young people who have started working struggle to break out of a state of "financial survival." They are often left with very little disposable income to save after their own and their family’s expenses.
Bad debt and loan sharks
It's no secret that South Africans are over-indebted. The debt crisis in this country has crippling effects on our economy and on young people who make uninformed and ill-advised choices to apply for credit that they end up being unable to afford. This can lead to a cycle of debt which can have a long-lasting and detrimental impact on their financial stability.
A severe financial knowledge gap results in young people making bad debt choices, ultimately affecting their access to education and other opportunities.
Trend and lifestyle pressures
It's difficult for a young person to be financially savvy. Social media influencers dictate how you should dress, where you should eat, what to drink, and what to drive. The pressure to stay on trend and to live a lifestyle that appears abundant is enormous. (And can lead to risky financial behaviour).
The lifestyle aspirations encouraged by advertisers and the media and on social media result in increased reliance on debt.
Money and mental health
Being short of cash or in debt is stressful and can impact mental wellbeing. A recent Feenix study done with tertiary education students shows that 75% of those surveyed are worried about finances, with almost 60% of the students reporting that this negatively impacts their mental health.
Stressing about finances impacts their ability to focus on their studies and ultimately affects their results.
One in five students feel pessimistic and lack confidence about their financial future, with the rising cost of living the most acute concern for students.
How are we equipping them to address these concerns?
Financial scams
According to the South African Banking Risk Information Center (SABRIC), South Africans lost more than R1.5-billion collectively in banking and card fraud in 2020. Add other scams into the mix, along with victims who are too ashamed to report being targeted, and that number is likely to be significantly higher.
Youth continue to be the target of job scams as unemployment rates continue to rise.
SO WHAT DO WE DO ABOUT IT?
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