Point of view: understanding the financial habits of South Africa's youth
Explore how South Africa's youth, aged 18 to 35, are navigating their financial journeys amidst economic pressures, balancing essential expenses with aspirations, and embracing digital financial tools.
The financial landscape for young South Africans is rapidly evolving, shaped by economic pressures, shifting priorities, and a growing reliance on digital financial tools.
The Youth Barometer, which harnesses data from Standard Bank's Personal and Private Banking and Liberty, offers a revealing snapshot of how South Africans aged 18 to 35 are navigating their financial journeys—balancing essential expenses with discretionary spending, financing their first assets, supporting their families, and planning for their long-term futures.
The inaugural Youth Barometer was launched this week in Rosebank.
According to the head of youth and mass market segments at Standard Bank, Tshiamo Molanda, these insights are more than data points; they are a call to action.
"They challenge us to design solutions that are relevant, inclusive, and forward-looking. Solutions that not only respond to where young South Africans are now but also anticipate where they aspire to go. Because when we understand youth better, we can partner with them more meaningfully, enabling them to grow as we grow," she says.
But where are young South Africans today, financially? The Barometer's findings provide answers.
Data from three million youth customers reveals a shifting pattern in spending habits. Young South Africans aged 18–24 allocate the highest proportion of their income to essential expenses (58%), followed by those aged 25–29 at 53%. Only the 30–35 group shows an even split between essentials and discretionary spending—a trend mirrored among those over 35, likely due to higher earnings reducing the strain of covering necessities.
However, younger generations spend proportionately less than their elders on insurance, loans, transport, and savings, while prioritising categories such as clothing, groceries, dining out, entertainment, digital connectivity, and self-care. Meanwhile, spending on education, healthcare, holidays, utilities, and family support remains fairly consistent across all age groups.
The data reveals that while the digital economy is expanding, cash withdrawals remain a common habit for youth aged 18 to 24, making it harder to track their exact spending patterns. Still, the data that remains within banking systems points to top spending categories such as digital connectivity, groceries, and fast food.
Interestingly, despite a decline in clothing spending from 2021 to 2024, younger customers still allocate more income to clothing than older youth, frequently shopping at brands like Mr Price, Pep, Ackermans, Sportscene, Pick n Pay Clothing, Shein, H&M, Cotton On, and Markham. Luxury brands also feature strongly, with spending patterns reflecting preferences for Farfetch, Louis Vuitton, Timberland, Steve Madden, Piccadilly, G-Star Raw, and Hugo Boss.
'This tells us that younger age groups have a higher brand affinity to luxury brands, because while we see some of this behaviour among older age bands, more reasonably priced brands feature among older youth,' says Shené Mothilal, solution owner for Digital Money Manager.
Young adults aged 18–24 allocate the highest proportion of their income to groceries among under-35s, alongside the highest spend on takeouts—indicating that while older customers increasingly cook at home, younger customers prefer a balance between eating in and dining out.
Among 25–29s, spending remains focused on essentials such as groceries, digital connectivity, and clothing. However, insurance and loan repayments begin rising, suggesting that many in this age group are establishing financial stability and working towards formal credit histories.
Meanwhile, those aged 30–35 start exhibiting spending behaviours akin to over-35s, allocating more of their income to insurance, loans, and healthcare. With incomes rising due to career advancement, their spending shifts away from essentials such as groceries, clothing, and digital connectivity. This trend is compounded by demographic factors—many are not yet supporting children, with South Africa's median age for first-time mothers now sitting at 28.3 years.
In a climate where the cost of living continues to rise and incomes remain under pressure, savings aren't optional—they're essential.
To address this, Standard Bank provides tailored guidance for different age groups:
18–24: Start small, but start now. Redirecting just R50 to R100 a month from takeouts, self-care, or entertainment into an emergency fund can create momentum. Using financial tools like Standard Bank's Digital Money Manager to track spending habits can help build consistency before scaling up savings contributions.
25–29: Rebalance discretionary splurges. This group is showing increasing financial maturity through higher contributions toward insurance and loans. However, they still rank second in clothing and takeout spend, suggesting an opportunity to fine-tune their budgets further.
30–35: Leverage career gains to build a cushion. With a more balanced split between essentials and discretionary spending, this group is well-positioned to accelerate their savings toward property, education, and retirement. Redirecting even a small portion of entertainment or takeout spending into interest-bearing financial products could significantly bolster long-term security.
The data reveals that despite making up nearly 60% of South Africa's population, those under 35 account for just 17% of the country's outstanding credit value. Their credit portfolios consist largely of unsecured products such as retail accounts, personal loans, and entry-level credit cards, unlike older generations, who have broader access to secured credit lines.
Once credit becomes available to them, young South Africans tend to use it extensively. For example, the average credit limit for 18–24-year-olds is approximately R20,000, with utilisation rates above 70%, suggesting many rely on credit for both necessities and lifestyle expenses. Additionally, youth in this age bracket make more credit card payments per month than any other segment, averaging three payments per month.
Encouragingly, youth under 35 are showing a strong and growing interest in property ownership, despite broader affordability concerns and rising living costs, the data shows. Approximately 40% of all new home loan enquiries at Standard Bank from January 2023 to April 2025 have come from this demographic, demonstrating a clear ambition to secure long-term financial assets.
Similarly, insights from Standard Bank's Vehicle and Asset Finance division indicate that youth aged 18–35 remain a vital segment in the car finance ecosystem, accounting for just under 40% of vehicle finance customers. However, limited incomes shape their decisions—from car brands to deposit sizes and repayment structures.
* Maleke is the editor of Personal Finance.
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Daily Maverick
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Investing in people through education, skills development and affordable, quality healthcare. Building state capacity and creating a professional, merit-based, corruption-free and developmental public service. Restructuring and improving state-owned entities to meet national development goals. Strengthening law enforcement agencies to address crime, corruption and gender-based violence, and strengthening national security capabilities. Strengthening the effectiveness of Parliament in respect of its legislative and oversight functions. Strengthening social cohesion, nation-building and democratic participation, and undertaking programmes against racism, sexism, tribalism and other forms of intolerance. Foreign policy based on human rights, constitutionalism, the national interest, solidarity and peaceful resolution of conflicts to achieve the African Agenda 2063, South-South, North-South and African cooperation, multilateralism and a just, peaceful and equitable world. DM
IOL News
3 hours ago
- IOL News
BEE is at a Crossroads - But Who Benefits from Its Destruction?
BEE, as it has been implemented in too many cases, has failed to meet the aspirations of the majority, writes the author. Gumede is right to point to the recycling of beneficiaries, the political gatekeeping, and the elite capture of empowerment deals. But he is wrong, dangerously wrong, if his insight is used to argue for scrapping BEE altogether. Let me be clear: BEE, as it has been implemented in too many cases, has failed to meet the aspirations of the majority. It is a critique we cannot afford to ignore. But neither can we afford to allow this critique to be weaponised by those who have always opposed transformation, to delegitimise the very idea of economic justice in post-apartheid South Africa. The recent critique by Professor William Gumede that over R1 trillion has been 'transferred' under Black Economic Empowerment (BEE) to fewer than 100 politically connected individuals is a sobering wake-up call. It is ironic that the same voices calling BEE 'racist' rarely propose solutions to white economic over-representation. Here are the facts: 8 of the top 10 richest South Africans remain white men. Over 70% of agricultural land remains under white ownership. Access to venture capital, export markets, and finance remains racially skewed. The idea that 'BEE is the biggest scam in post-apartheid SA' dangerously distracts from the real structural crisis: the continued racial and gendered concentration of wealth. Certainly not the millions of unemployed black youth in townships and rural villages. Not the historically disadvantaged communities who still lack access to capital, land, and markets. And not the African, Indian and Coloured women who remain structurally excluded from the mainstream economy. We must ask ourselves: who benefits when BEE is destroyed instead of reformed? Reset restore all settings to the default values Done Beginning of dialog window. Escape will cancel and close the window. The only ones who benefit from the collapse of BEE are those who were never in favour of transformation in the first place the economic oligarchs who would be thrilled to return to a status quo of white dominance wrapped in the language of meritocracy. Despite limitations, BEE is not a failure: Over 6 million black South Africans now hold direct or indirect ownership in companies through broad-based share schemes (e.g. MTN Zakhele, SASOL Inzalo, Phuthuma Nathi at MultiChoice). Black ownership on the JSE has grown from less than 1% in 1994 to an estimated 25–30% today (direct + indirect via funds and B-BBEE schemes). Over 50,000 black-owned SMEs have been supported via enterprise and supplier development obligations. BEE has enabled the creation of black industrialists, catalysed youth training schemes, and expanded procurement access. The BEE scorecard includes ownership, skills development, employment equity, socio-economic development, and procurement. It is a multidimensional framework, not simply elite enrichment. However now that we know better , we must do better. Acknowledge the Failures, But Don't Abandon the Mission As a former Member of Parliament and lifelong activist for social and economic justice, I have seen first-hand how some BEE deals were little more than rent-seeking schemes. Politically connected figures often acted as fronts for white capital, offering legitimacy without empowerment. These are not just moral failings they are strategic betrayals of the people. But the answer is not abandonment. It is reform, accountability, and reorientation toward true broad-based empowerment. We must ask: What models have worked? What does inclusive, community-rooted BEE look like? And how do we ensure that BEE no longer becomes a revolving door for the same elite, but instead a ladder for the many? What Broad-Based Empowerment Really Looks Like The idea of broad-based empowerment is not hypothetical. I have checked ,it actually exists though often drowned out by the noise of scandal. Let us spotlight real, replicable models that show us what is possible. 1. Sasol Inzalo Trust (2011) – R26 Billion Empowerment for the Public One of the largest and most ambitious empowerment transactions in South African history. Over 200,000 South Africans from nurses to pensioners acquired shares in Sasol via the Inzalo Trust. This was not an elite project, but a mass participation vehicle offering dividends, ownership, and dignity. Yes, the deal had flaws (especially when Sasol's share price dropped), but the intent and structure were inclusive. We must learn from and build on this. 2. Absa Employee and CSI Trust (2023) – A New Vision for BEE In 2023, Absa created a model that should become the new gold standard. It allocated 7% of its ownership to: 3% for over 35,000 employees; 4% to a Community Trust focused on healthcare, education, and township upliftment. This is real empowerment linking productivity with ownership, and profit with community reinvestment. 3. PepsiCo / SimbPioneer Foods (2020) – Worker Trust PepsiCo's merger with Pioneer Foods resulted in a R1.66 billion worker trust benefiting over 12,000 employees 90% of whom are black. It wasn't politically brokered. It was structurally designed to include workers at scale. 4. Heineken's 'Bokamoso' Trust (2021) When Heineken acquired Distell, it was required by the Competition Tribunal to create a broad-based employee share scheme. 'Bokamoso' gave 6% equity to workers a model where empowerment was made a regulatory condition of doing business in South Africa. These are not isolated cases. They are models for the future evidence that BEE can work, and work for the people. Why can the JSE Top 100 Listed Companies not follow this and give shares to their workers, their customers and communities they serve? B-BBEE That Serves the Nation, Not the Network For BEE to be legitimate, it must: Stop recycling elites: No individual or consortium should benefit from more than one major BEE deal. Impose sunset clauses: Empowerment credentials must expire after a certain period. Create a National BEE Beneficiary Registry: All deals and beneficiaries must be publicly disclosed and tracked. Mandate community participation: At least 30% of all future equity deals must be routed through community trusts, worker funds, and township co-operatives. Align with the District Development Model: BEE must build local economies not extract value from them. We must turn BEE into a mechanism for building black productive capacity, not just redistributing shares. That means more funding for black industrialists, township-based manufacturing, rural cooperatives, and tech-enabled youth entrepreneurship. A Call to Action: Reclaim Empowerment from the Few, for the Many To comrades, policymakers, business leaders, and community activists: we are at a crossroads. Either we allow the failures of the past to paralyse us or we reclaim the transformative promise of BEE and remake it to serve all who were historically disadvantaged: Black Africans, Coloured South Africans, Indian South Africans, women, youth, people with disabilities, and the rural poor. I call on the ANC to: Codify a new generation of community-based empowerment deals Reject individual-based enrichment without public impact Strengthen the oversight powers of the B-BBEE Commission Incentivise cooperatives, worker-ownership, and community reinvestment We must restore the moral authority of economic redress by placing THE PEOPLE not political patrons at the centre of empowerment. Conclusion: Build, Don't Burn Professor Gumede has done us a service by exposing what went wrong. But let us not allow this moment to be hijacked by reactionaries who wish to dismantle BEE altogether. Let us not abandon the house of transformation because the roof leaked. Instead, let us rebuild it, repair it, and expand it, so that it shelters all South Africans who have for too long lived on the margins. We don't need to scrap BEE. We need to liberate it from the few and make it finally work for the many. That is the real empowerment and economic justice we must fight and struggle for. This opinion piece was first published in ANC Today * Faiez Jacobs is a former MP, Public Policy Strategist and Advocate for Economic Justice ** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.
IOL News
4 hours ago
- IOL News
The importance of financial planning for South African youth
Discover how young South Africans can enhance their financial well-being alongside their focus on therapy and fitness, and learn essential strategies to build a secure financial future. More young South Africans are prioritising wellness through therapy and fitness, but they continue to overlook financial well-being, and it is costing them more than they realise. Money stress spills into every part of life, from relationships to mental health, yet many young people build their early careers without building a financial plan According to a Sanlam report, 57% of South Africans cite financial stress as the top factor affecting their mental health, with 18–24-year-olds the most vulnerable. Yet, despite South Africa's high youth unemployment rate, there are 20.9 million working young people aged 15 to 34 who still face financial challenges due to limited financial literacy. The 1Life Youth Generational Wealth Survey found that while 80% believe they can build wealth once employed, only 30% have a monthly budget, and half don't know how to secure their financial future. The opportunity to build strong financial habits early is invaluable. Even modest savings in your 20s can have a powerful impact by your 50s. Good habits compound over time. Like a muscle, the earlier you start these habits, the stronger they become. Many young people assume that financial planning means cutting back on their current lifestyle, says Brachner. Good advice isn't about restrictive spending, and we often encourage our clients to travel and celebrate life's experiences, as this is important in your 20s. Rather, a good financial plan gives you the freedom to do more of what matters now, while still setting yourself up for the future. There's a common misconception that financial advice is only for the wealthy. Traditional advisor models typically focus on assets to invest, which excludes most young people who typically only have a salary to invest. But they still need guidance - not to manage wealth, but to build it. Just like they invest in therapy or fitness, they can invest in financial well-being. A 2024 AfroCentric study revealed that while 94% save for retirement, only 8% have consulted a financial advisor. Formal, tailored advice remains underutilised in South Africa. Too often, young people turn to well-meaning relatives or friends for advice. But a Certified Financial Planner (CFP®) is like a family GP, someone who understands your life, has no agenda, and helps you build a plan that works for you,' says Brachner. Five tips for young South Africans who want to take control of their financial future: 1. Create a plan and don't go the DIY 'finfluencer' route. There's no shortage of financial advice online, and increasingly, a flood of 'finfluencer' content on social media. Some of it is useful, a lot of it is not, and without proper training, it's hard to tell the difference. You wouldn't diagnose a serious illness by Googling symptoms. The same logic applies to your finances. A qualified professional can cut through the noise and guide you based on your unique goals and circumstances. 2. Choose a Certified Financial Planner (CFP®): Just like you'd want a qualified doctor for your health, you need a certified financial planner (CFP®) for your finances. CFPs are held to global standards, pass rigorous board exams, maintain ethical codes, and are required to act in their best interest. It's the peace of mind you won't get from TikTok. 3. Seek out advice that isn't product-driven: Good financial advice should start with you: your life, your goals, your values. Insurance or investment products may support your plan, but they shouldn't be the plan. If the advice is just a way to sell a product, it's not real financial planning. 4. Know how financial advice is priced, and pick a model that works for you: Financial advice isn't free, but how you pay matters. Too often, fees are hidden behind phrases like 'it's included,' which can sound appealing, especially to younger investors, but might not deliver value. Here's a breakdown: · Commission-based: This is common with life insurance and some investment products. Advisors earn upfront commission when they sell a product, but often provide little follow-up advisory service. · Assets under management (AUM) advisors: Advisors charge a percentage of your investments. This model can work if you've already built up wealth, but if you're starting in your financial journey, some advisors may still take you on, but only by selling you commission-based products. This may mean you are deprioritised compared to wealthier clients. · Flat-fee advisors: You pay for advice based on your needs, not your assets. This model provides access to objective, personalised advice, which is beneficial for young professionals who are earning, saving, and investing for the first time. This advice is offered as a once-off or monthly fee, based on your level of financial complexity. 5. Remember, financial freedom isn't about restriction. The goal of a solid financial plan isn't to stop you from living now so you can enjoy life later (in retirement). It's about aligning your spending with your goals. When you have clarity and a plan, it often unlocks more freedom to say yes to what matters to you, whether that's travel, upskilling, or pursuing a side hustle. * Brachner is a founder of Doshguide. PERSONAL FINANCE
