Results from the 2015 South African Social Attitudes Survey (SASAS) indicated a positive relationship between education and budget keeping, as 79% of adult South Africans with a tertiary education reported having a household budget. Considering only two out of ten matriculants could expect to be accepted into universities in 2017, the majority will have to make alternative plans when it comes to their education. There is also the issue of between 50%—60% of students dropping out in the first year, with little chance of them re-entering the system.
“For this reason, there remains a lack of financial literacy, especially amongst those who do not obtain tertiary qualifications but still have to start managing their own finances once they start earning a salary,” says Derek Wilson, head of online insurance and financial comparison website, Hippo.co.za, “There is, however, still an opportunity for parents or guardians to educate the youth on how to manage their finances from an early age”.
Once teenagers start to move towards becoming more independent, there are various financial decisions they need to consider such as learning to keep a budget, opening their first bank account, applying for finance for their first vehicle and what to insure when.
Hippo.co.za provides tips on how adults can help the youth to be more financially savvy from an early age.
1. Keeping a budget
This is perhaps the easiest and most important foundation that can help the youth establish good money habits that will be invaluable when they reach adulthood. With the increase in the youth having access to the Internet and smartphone devices, advise them to search for budget planners online and let them select one that they prefer. The simpler, the better. To make it easier for Millennials and Generation Zs, get them to select a budgeting app on their smartphone as this practically does the work for them, saving them (and you) time and hassle.
2. Opening a bank account
Although parents usually open bank accounts for their kids at an early age, once they hit their youth years, let them research the different banks, check customer reviews online, compare the interest rates and bank charges and look at added value from the different banks available. Ask them for their feedback and which bank they prefer and allow them to be present during the process of opening the account so that they experience what it is like to be a client and to compare the market.
3. Applying for Vehicle Finance for their first car
When looking to get Vehicle Finance for a new or used car, the dealership where you found the ideal ride may recommend a preferred Vehicle Finance provider. Be sure to compare financing options from three or more trusted and credible Vehicle Finance providers before signing an agreement as you may find a better deal that could save you money in the long run. Teach your kids to live by the three or more quote rule in future should they be ready to apply for finance on their own.
4. Getting insurance
Insurance is not the first thing that young adults think about when they get their first car, move into their first flat or if the number of their valuable goods start to increase considerably. When it comes to insurance and financial services, one should not simply go with the brand that screams the loudest. Shop around and get at least three quotes before you buy. Hippo.co.za allows you to get multiple quotes from a range of South African providers in minutes.