Young savers win the long game

Teaching young people to save early helps set them up for financial freedom later in life. By Neesa Moodley

- Neesa Moodley

I was taken aback earlier this year when my almost-but-not-quite 18-year-old called me in a panic to ask me how to use an ATM to draw cash.

"I always just get cash from you, or swipe my card," he said. Oops. Sometimes it's easy to miss the small things when you're focused on stressing the bigger things (like saving).

Once that little hurdle had been addressed and he got the hang of budgeting each week, he came to me with a request to set up a savings system using his own money. He had a lump sum of R5,000 to start with - money he had earned working a holiday job.

Some of you may think it's overkill, but I kicked him off with a retirement annuity fund in an aggressively positioned unit trust fund. The amount is R500 a month and he started a few months shy of 18.

"Keep putting in R500 a month for the rest of your life, forget about it and only look at it again when you are 10 years away from retirement or 55," I told him. I'm sure when he starts earning one day, he will contribute more (I hope) to his retirement savings, but if I kick the bucket tomorrow, at least he has started his financial journey on the right foot.

Students battle debt