By André Wentzel, 18 July 2018
Sanlam’s 2018 Benchmark Survey shows this simply isn’t the case: for the majority of millennials, saving for big long-term goals is top of mind but can seem unfeasible.
Gen Y (born between 1981 and 1998: currently aged 20-37) spans a vast age bracket across various life phases. With major expenses like moving out, lobola, weddings, buying a car - or even a house – and thus more to budget and save for, the short- to medium- goals inevitably trump the long-term goals. So how does a job-juggling, frequently family-supporting, debt-saddled generation of savvy side-hustlers win at the long-term savings game?
By capitalising on their strengths and acknowledging areas to grow in.
Millennials are the best-educated generation to date, but they’re drowning in debt, with limited employment opportunities, lower real earnings and less disposable income. And they’re engaging the job market in a completely different way. The average person will have 12 to 15 jobs in a lifetime due to a rapidly changing employment market. With millennials comprising over 40% of SA’s workforce, this has big ramifications, particularly for retirement and savings preservation.
They’re also less attached to conventions which means they’re charting new territory and facing a fresh flush of socio-economic challenges. We know they’re using tech tools to thoroughly investigate potential purchases via snackable online content in bite-sized bits.
But they’re also overconfident despite low financial literacy and limited financial education. 60% of millennials believe they don’t need help – many are untrusting of financial services, so they tend not to approach
financial planners for help with achieving their goals. And to date, they’ve not been a focus for financial planners due to their low asset values.
This is a pity, especially as millennials do want to save and with their multifaceted goals, and their drive, are primed for good advice and a steer in the right direction.
In terms of big goals, many millennials want to go on holiday, buy a car and/or property, get married, pursue further education, grow their net worth and achieve financial independence. Most of these may require saving and investing over a medium term (1-3 years) or a long term (usually anything longer than 5 years).
The barriers to achieving these goals include:
Perhaps the most exciting attribute of millennials is their innate curiosity. Use it. Research extensively and ask questions. Find a
financial planner that you’re comfortable with and who can help unpack your goals and put a plan in place to give you the best chance of achieving them.