WITH the constant focus on Millennials it’s easy to miss that not all the kids of Generation Z are kids – some are working adults.
However, it doesn’t look like Gen-Z is going to be any better at saving than any of Mzansi’s previous generations.
South Africa’s household saving rate halved from an already low 0,40% to 0,20% between October and December last year, according to Trade Economics.
Sonja Visser from the financial services company African Unity has advice for people under financial pressure.
The Sandwich Generation
Between Generation X and Millenials is the Sandwich Generation. These are people between 31 and 49 years who are unable to save due to financial responsibilities to dependents. Known in kasis as the infamous black tax, it dampens the ability to save for retirement and other critical needs.
Saving advice
- Help children set up a simple budget so they can plan what they can do with their pocket money.
- Show them how they can save over a period time for an item that’s too expensive for them to afford right now but is a better use of their money than sweets and cheap trinkets.
- Demonstrate how compound interest works by putting a small amount of money in a unit trust and letting them work out how interest slowly adds to their amount.
Financial lessons for different ages
- A five-year-old needs to know what a bank is and what it offers. Ask them to identify and count coins in a collection such as a spare change jar.”
- A 10-year-old needs a chat about what interest is and how it affects loans. They also need to know about inflation – how items and services get more expensive over time – such as how a packet of chips that used to cost 50c now costs R5.
- 15-year-olds need to know more complicated and abstract concepts – especially if they are studying accounting at school. You can teach teenagers about stocks, bonds, property, credit, home loans as well as other forms of financial services and investments.
“This is also a good time to come clean about the money mistakes you have made in the past – trusting the wrong people or spending money you didn’t have – to avoid making similar mistakes in the future,” said Visser.
