Getting Youth to Manage Their Money Better
Getting Youth to Manage Their Money Better. Getting youth to manage their money better is no longer a nice-to-have – it is an urgent necessity in South Africa. Recent research underscores this pressing need, revealing alarming gaps in financial literacy and practical money skills among young people, especially students enrolled in TVET colleges.
A groundbreaking survey conducted by Old Mutual, in collaboration with South Africa’s Technical and Vocational Education and Training (TVET) colleges, exposes the challenges faced by students aged 18 to 25 in managing their finances. Despite their confidence, many are grappling with debt, poor budgeting habits, and minimal savings, all of which threaten their financial stability and future prospects.
The Reality Behind Student Financial Confidence
One of the most revealing aspects of the Old Mutual survey is the stark difference between perception and reality. According to the data, 72% of students felt confident about managing their money, yet the overwhelming majority — 78% — admitted they did not know how to budget properly. This discrepancy is critical. Confidence without competence can lead to poor decisions, mounting debt, and financial stress.
The table below highlights key findings from the survey that paint a clearer picture of the financial behaviours of TVET students:
| Financial Behaviour | Percentage of Students |
|---|---|
| Confident in managing finances | 72% |
| Do not know how to budget properly | 78% |
| Have a budget but don’t always stick to it | 52% |
| Don’t have time to budget | 25.7% |
| Both have and stick to a budget | 22% |
| Saving regularly | 28% |
The Debt Trap
Another concerning insight is the relationship students have with debt. In a smaller sample of 249 students, 11% revealed they were in debt, with 20% of these students saying they were not coping. Alarmingly, more than 14% of respondents admitted to missing classes due to financial difficulties. This highlights how financial strain doesn’t just impact wallets — it directly interferes with academic progress and overall well-being.
Getting youth to manage their money better must include strong messaging on distinguishing between “good debt” and “bad debt.” Good debt might include education loans that have the potential to increase future earnings, whereas bad debt often involves high-interest consumer credit that quickly spirals out of control. Many young people simply lack the tools to navigate this landscape.
The Missing Habit
The survey also revealed that only 28% of students are saving regularly. This is a worrying statistic because saving and investing are foundational to long-term financial health. Many students believe they don’t earn enough to save or invest, overlooking the vital truth that the earlier one starts, the greater the long-term benefit. Even small, consistent contributions can grow substantially over time due to compound interest.
Old Mutual’s Financial Wellbeing Programme emphasises protecting and growing wealth as a lifelong habit. Embedding these principles early is critical. Students should be encouraged to start with simple goals, like setting aside a small percentage of any money they receive, gradually building a mindset geared towards financial security.
The Power of Financial Education
Perhaps the most promising aspect of the research was how even short interventions can significantly improve financial capability among the youth. Before participating in financial training, students reported an average of 41% financial confidence. Post-training, this jumped to 57%. Similarly, only 28% felt financially informed before, but after the programme, 48% believed their financial knowledge had improved.
This proves a vital point: financial education works. It empowers young people to make informed decisions, manage debt responsibly, develop healthy budgeting habits, and build resilience against life’s inevitable financial shocks.
| Metric | Before Training | After Training |
|---|---|---|
| Financial Confidence | 41% | 57% |
| Financially Informed Students | 28% | 48% |
Why Financial Literacy Should Be Prioritised at TVET Colleges
TVET colleges play a critical role in preparing young South Africans for the workforce. However, without adequate financial skills, graduates are at risk of falling into cycles of debt and financial instability. Integrating robust financial education into TVET curriculums will ensure students not only excel in their chosen trades but also know how to manage their earnings wisely.
Moreover, financial stress can derail academic efforts. As shown by the survey, over 14% of students skip classes due to money problems. This underscores the importance of equipping learners with practical tools to navigate budgeting, saving, and borrowing responsibly.
How to Get Youth to Manage Their Money Better: Practical Steps
- Start Early: Encourage budgeting from the first moment they receive an allowance, bursary, or salary. Digital apps can make this easy and engaging.
- Teach Debt Literacy: Help students understand interest rates, repayment terms, and how to differentiate between types of debt.
- Promote Saving Goals: Even small milestones, like saving for a mobile phone or emergency fund, build positive habits.
- Provide Ongoing Support: Workshops, peer groups, and mentorship programmes can reinforce learning.
- Use Real-Life Simulations: Practical exercises like budgeting challenges or investment games make financial concepts tangible.
Conclusion
The findings from the Old Mutual and TVET college survey are both sobering and hopeful. While they expose significant gaps in budgeting, saving, and debt management among young South Africans, they also demonstrate that targeted financial education can dramatically improve knowledge and confidence.
