In the past, most teenagers living with their parents might have felt little motivation to save some of their chore or pocket money to realise their own goals. But if you are one of the under 18 members of generation Z who have learnt from your parents’ mistake of not saving enough and witnessed firsthand how people around you suffered financially during the pandemic, you might already be thinking of saving money to determine your own financial future.
When you put away the money you make from doing chores at home or having your own hustle like babysitting, tutoring online, or walking the neighbourhood’s dogs, or when you make up your mind to save, you are making a smart decision. Saving from a young age will help you to achieve your first financial goals (like studying, traveling, or buying a car) at a relatively young age and teach you the financial discipline you need to set forth and realise your great life ambitions.
It is a worthwhile journey that will teach you how to manage your money and help you become more financially independent. So, to ensure that you save successfully, here are a few tips from Motlatsi Mkalala, Standard Bank’s Head of Main Market at Standard Bank outlining the top money habits you can adopt:
1. Save before spending
Set aside a portion of any money you generate or receive before you spend it, whether it’s your allowance, income from a part-time job or a gift. When you put money in the bank before you can even think about buying the things your heart desires, you will ensure that you save money on a regular basis and be less tempted to spend all your earnings.
2. Open an interest-bearing savings or cheque account
Teenagers who open an interest-bearing savings or cheque account where they save their money are often more motivated to save. It gives you an out-of-sight place to put your savings and make your savings journey official. Another benefit is that you will learn about the effect of interest and in time experience the effect of compound interest that will inspire you to save more.
3. Ask your parents to match your savings
If you are part of a middle-class or affluent household, ask your parents to match your savings or match half of it. This will give you extra motivation to save R100 or R500 a month and let them know that you are doing your part to take charge of your financial future.
4. Set goals
Teenagers, just like other people, tend to save more money when they have a financial goal. Whether you want to make a trip, buy new sports gear, or sign up for a course, it will be easier to put your rands away
if you know what you are saving for. It will also help you to delay gratification when you see those goods that tempt you to spend your money straightaway.
5. Track your spending
A smart way to manage your money is to keep track of it. After a few weeks or months of tracking your spending with a spreadsheet or app, you will see where you spend your money and have an idea of where you can cut back to stay on track with saving.
6. Give yourself an allowance
If you are one of those financially savvy generation Z-ers who have two side hustles or a side hustle and part-time job, pay the earnings from one of your income streams straight into your bank account meant for saving. In this way, you will not be tempted to spend the money but instead cultivate financial discipline.
7. Instill delayed gratification in yourself
If some of these money saving tips seem hard to you because you live for the present when it comes to managing your money, teach yourself delayed gratification by making a list of your financial priorities over the next one to three years. Then come up with a plan to save enough money to take care of each of them.
Becoming a successful saver at a young age will empower you in the short-term and bring you many long-term benefits. You might even be able to start your own business or learn skills that will bring you a more stable income. Don’t be deterred if you are only saving a small amount to begin with, the magic of compound interest means that when you start early even modest amounts grow into large sums.
