We speak to Kgodiso Mokonyane, head of business strategy at Momentum Retail, about the spending habits and culture of South African millennials, known as Afrilennials.
By Fundiswa Nkwanyana
Afrilennials must be willing to adjust their behaviour in order to make their rand go further. According to research done on the Momentum/UNISA Household Financial Wellness Index in 2016, 16% of Afrilennials have a budget, but 35% of them struggle to stick to it. It is therefore believed that Afrilennials are not financially savvy. But, the same can be said about people from other generations.
They find get-rich-quick schemes appealing. Today’s young generation is believed to have an instant gratification culture, which makes them easy target for syndicates promising to give huge investment returns over a short period of time. It is advisable for the Afrilennials to keep a close relationship with their financial adviser to avoid this temptation and to cultivate good spending habits.
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Afrilennials in urban and rural areas have different payment methods and spending habits. Those living in urban areas tend to use electronic money more because it is convenient. On the other hand, those in rural areas use hard cash more because card payments are not widely accepted.
They often have to pay black tax. This makes it difficult for them to save and as a result, affects their spending habits. However they encourage each other to participate in stokvels as part of their social culture, resulting in short-term savings. The high youth unemployment rate in South Africa makes it even harder for Afrilennials to save when they have pressing financial constraints. This, in turn, makes it harder to focus on their future financial needs.
For financial wellness, parents should guide Afrilennials. This way, they can save for a rainy day, avoid taking debt to pay for day-to-day expenditure and learn from their financial mistakes.
