A young professional's guide to building wealth

SOUTH Africans are facing a time of unprecedented financial complexity, which is why it’s more crucial than ever to develop strong financial habits from an early stage, according to wealth manager Citadel.

- STAFF REPORTER

According to the Citadel, compelling evidence, both locally and globally, suggests that Millennials (Gen Y) face far greater financial challenges than previous generations. Research from the Journal of Consumer Research indicates that Gen Y struggles significantly more to finance homes and other large expenses compared to Baby Boomers in the 1970s.

Meanwhile, Ipsos research highlights that historical inequalities have left many South African Millennials without inherited wealth, making financial security harder to achieve.

Citadel Advisory Partners Kirsten Smit and Elelwani Ravele provide a financial roadmap to help working professionals navigate today’s economy.

"Your first salary sets the tone for your future financial habits," says Ravele. "From the outset, working professionals can calculate their fixed costs for items like groceries, entertainment, and transport to avoid the trap of lifestyle inflation."

Smit agrees, emphasising the importance of financial balance. "The goal is to enjoy your life but still create a deliberate surplus that can go into discretionary and retirement savings."

For young professionals, avoiding emotional or impulsive financial decisions is vital, especially when it comes to high-cost purchases.