Out of pocket but not ideas: millennials make ends meet
They might be recently independent but financially strapped, but they're resourceful enough to rise above it, researchers have found
By day Thandi Ntuli* is a dutiful hotel employee.
At night the 27-year-old transforms into a small-time businesswoman in the beauty world.
Ntuli has two sources of income – one that pays the bills and the other to take care of the little luxuries she craves.
She is, according to the Old Mutual’s latest Savings and Investment Monitor, classified as Recently Independent but Financially Strapped (RIFS).
The research examined the financial behaviours and attitudes of a sub-segment of millennials – working individuals aged 18-35 years, who are RIFS.
According to the findings, one in three RIFS hold down more than one job to boost their income, and four out of five share accommodation.Ntuli found it imperative to find an alternative source of income, after working in the hotel industry for five years.
“I decided to start a small business on the side as my financial responsibilities had grown beyond what my salary could cover.
“It’s in the beauty/cosmetics industry and started off as a small Instagram page which has grown to over 7,200 followers as of last month.
“It is very challenging as it operates solely as an online store and demands that I be able to communicate with customers all the time.”
She believes an alternative source of income is a must.
“Salaries cover things like transport, accommodation, medical aid and education.
“If you would like to be able to afford the luxuries, they need to substituted by a different source of income. For me, the second source of income is a life saver.”
The research found that RIFS, while financially strapped, are resourceful enough to rise above it.
The majority of RIFS revealed they were actively saving and investing, although they were light in the pocket.Reasons for saving range from wanting to buy a home to unforeseen expenses to upgrade their lifestyle.
Lynette Nicholson, research manager at Old Mutual, said: “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.”
Petrol and transport are the biggest expenses for RIFS, after they’ve paid rent or a 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.
Independence, said the RIFS in the survey, when they moved out of home, has made them more conscious of their eating habits and the environment.
Nicholson believes the responsible attitude of RIFS is helping to drive an overall trend in SA away from indebtedness and impulsive spending towards a more cautious, money-wise approach.
“It bodes well for the future. Building a strong national savings culture is a priority for South Africa right now.“
* Not her real name