Essential money management tips for building a secure financial future in your 20s
As young South Africans continue to struggle with rising inflation and mounting financial pressure, financial experts have called on those who are in their early 20s to ensure that they develop healthy money habits.
Image: Karen Sandison/Independent Newspapers
As young South Africans continue to struggle with rising inflation and mounting financial pressure, financial experts have called on those who are in their early 20s to ensure that they develop healthy money habits.
According to data from analytics company Eighty20, individuals aged 18 to 24 are being hit hardest by economic strain, with high unemployment rates, increasing debt levels, and limited access to formal financial systems.
"Eighty20’s National Segmentation reveals that of the 6.7 million youth aged 18-24, only one million are credit active".
"Yet among these credit users, nearly half have defaulted on their loans. With an average monthly income of R3,400 (less than half the national average of R7,000) and a youth unemployment rate of 62.4% according to Stats SA, financial strain is widespread in this age group".
However, PSG’s “Future Females in Finance,” Bianca and Annika Strydom, emphasise that despite these challenges, young South Africans can still shape a stable financial future.
“It ultimately comes down to three key financial habits. The first and arguably most important is living below your means. If your expenses are consistently higher than your monthly earnings, you’re in for major trouble down the line," Annika said.
How can young South Africans take control of their finances
Here are three essential habits every young person should adopt, according to Bianca and Annika Strydom from PSG.
Get a financial safety net in place
Bianca recommends building an emergency fund covering three to six months of essential expenses. Start with small, regular contributions and keep the money in a high-yield savings account to grow while staying accessible.
"Before even thinking about investments and retirement, build up an emergency fund that can act as a buffer for any unexpected expenses that may arise. Ideally, you should aim to cover three to six months’ worth of essential living expenses,” Bianca.
Stay on top of your credit
Understanding credit is crucial in your 20s, affecting everything from renting to loans. Build a good credit profile by paying bills on time, using manageable credit accounts responsibly, and avoiding multiple applications. Managing debt wisely while steadily building savings is key to financial health.
“To build a good credit profile, pay your bills on time – every time,” says Annika. “One missed payment can hurt your score for years.”
Small steps that pay off later
Investing in yourself through upskilling and exploring side hustles now can lead to higher earnings and additional income streams later. Building financial literacy is also crucial, as the knowledge gained will benefit you for years. Above all, start early—time is your greatest asset.
“Now is the time to invest in yourself,” says Bianca. “The earlier you upskill yourself, the greater the potential return through higher earnings over your lifetime.”
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