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This is what key findings from the 2018 Old Mutual Savings & Investment Monitor indicate.
An online booster sample focused on the financial behaviours and attitudes of a sub-segment of millennials: working individuals aged 18 – 35 years who are Recently Independent, but Financially Strapped (RIFS).
According to this survey, one in three RIFS holds down more than one job to boost their income, and four out of five are sharing accommodation.
What’s more, the majority (63%) say they are actively saving and investing. Funeral policies (66%) and life cover (65%) head the list of financial solutions used. Thinking long term is clearly a priority: nearly half have some form of banked cash savings and/or retirement annuity (RA), while nearly one in five have invested in shares and/or unit trusts.
Reasons for saving range from saving to buy a home to saving for unforeseen expenses or to upgrade their lifestyle.
Lynette Nicholson, research manager at Old Mutual, says, “Leaving home in a tough economic climate has become a significant challenge for young adults, and for half of 18 - 34 year olds it’s more feasible to continue living at home.
“Those who have been able to launch themselves, like the RIFS, are on average 29 years old (older millennials) and earning in the region of R19 000 per month. About 72% have some post matric qualification and 88% own a car. But even for RIFS, it’s not all plain sailing. At least 17% continue to depend on their parents financially, and nearly half have boomeranged and moved out more than once.”
The cost of petrol and transport is the biggest expense facing RIFS, after they’ve paid their rent or home loan. This is followed by groceries, electricity and medical expenses.
RIFS are well connected, with 79% owning a laptop, 77% having more than one cellphone and 65% equipped with an internet router.
A valuable by-product of independence, say RIFS, is that moving out of home has made them more conscious of their eating habits (67%) and also made them recycle more (48%).
Nicholson believes the responsible attitude of RIFS is helping to drive an overall trend in South Africa away from indebtedness and impulsive spending towards a more cautious, moneywise approach. “It bodes well for the future. Building a strong national savings culture is a priority for South Africa right now,” she says.