Investment pros share real money lessons for students

Cape Town - South African students spend nearly R1 700 a month on groceries, while managing to save just R352, according to the latest Varsity Vibe Student Spend Survey. That translates to a savings rate of roughly 17% - a figure that stands out in the context of rising living costs and limited income opportunities for young people. As Youth Month unfolds, this data serves as a timely reminder that financial independence starts with education – not just in lecture halls, but in everyday money decisions.

In the lead-up to Youth Day, experienced investment professionals from Satrix*, South Africa's leading provider of index-tracking investment products and exchange traded funds (ETFs), share personal reflections alongside new data to spotlight a vital issue: the money lessons young South Africans often learn too late. From missed opportunities to smart first moves, the goal is to equip today's students with practical insights to help them build a stronger financial future.

"Start small, but start now"

For Fikile Mbhokota, CEO at Satrix, the journey into investing began early. At just 23 years old, she and a group of friends formed an investment club where they researched and exchanged ideas on where to put their money. This hands-on experience sparked her understanding of the power of disciplined, long-term investing.

Mbhokota believes the power of compound interest has the potential to change everything for South Africa's youth.

"Investing isn't a gamble - it's a long-term commitment to your future. If the average student, who has around R1 873 saved, invested just R2 000 in the JSE Top 40 today and left it untouched for 40 years, it could grow to nearly R90 000** thanks to compound growth."

And it doesn't require thousands to begin. Starting with even a small amount can help build the habit of investing early and develop the mindset to see money as a tool for growth, not just spending.

"Planning eliminates scarcity," she adds. "Even working part-time while studying taught me essential money management skills that are far more valuable than any one pay check. Starting early, no matter how small, can set young people on a path toward true financial independence."

"Your tight student budget is not a weakness - it's your financial foundation"

Kingsley Williams, Chief Investment Officer at Satrix, believes the constraints of student life offer a unique opportunity to build powerful money habits.

"This is the time to learn how to live within your means, avoid debt, and get creative about saving. Don't wait for abundance to start building discipline," he says. "Learn to distinguish between needs and wants and remember – there's no such thing as a free lunch. Even a small reserve built through discipline today is more valuable than debt-funded spending."

He urges students to understand inflation's quiet impact on their money.

"We live in a compounding world - and inflation is compounding too. That's why your money must work harder than you do."

Inflation may seem abstract in school textbooks, but in reality, its impact is immediate, silently reducing what your money can buy over time. This is why investing early, even in small amounts, helps keep your money growing ahead of inflation.

His tips? Invest for the long term, stay diversified through low-cost index funds, and avoid reacting emotionally to market dips. "Volatility is part of the journey," he says. "Don't be too conservative early on - match your investment horizon with appropriate risk, and don't panic during short-term corrections. Stay invested, and where possible, use downturns as opportunities to invest more."

Williams also encourages students to invest in themselves first. "Your education is your most important long-term investment. Commit to it, take it seriously, and it will pay dividends far beyond your first pay check."

"Put respect on your debit orders"

Siyabulela Nomoyi, Quantitative Portfolio Manager at Satrix, reflects on a missed opportunity that many students will recognise: not applying real-world thinking to the financial formulas they learn in school.

"I wish someone had connected the dots between Grade 9 maths and my real financial life. A = P(1 + r)^n is more than just a formula – it's a tool for wealth."

He recommends these small, practical tips to help you on your journey to wealth:

• Set up a zero-fee bank account
• Open a Tax-Free Savings Account (TFSA)
• Use debit orders for savings and investments to make them non-negotiable

"You wouldn't skip rent. Don't skip your investment contributions either," he advises. Automating your savings makes consistency easier. Treating investment contributions like a fixed monthly cost helps eliminate the temptation to skip them, even when money feels tight.

Student spending: What the numbers reveal

The Varsity Vibe 2024 Student Spend Survey paints a revealing picture of how students navigate money:

• Students spend R1 701/month on groceries - their biggest surprise expense.
• Only 18% stick to a budget, despite 60% creating one.
• Students save or invest just R352/month, despite having access to support from family, financial aid, or part-time work.
• In a financial emergency, 76% still turn to their parents.

Getting budgeting right starts with practicality. Small strategies like comparing prices across stores, prioritising long-term use over short-term trends, and sticking to shared goals – like buying in bulk with friends - can help make budgets more realistic and easier to follow.

The big lesson? Start where you are

Many Satrix leaders admit their own financial education came late, often learned through trial and error. But they all agree it's never too early to start.

Getting into the habit of investing - even with just a few rand - is more valuable than waiting for the 'right time'. It shifts your mindset from spending to growing. Smart early steps include opening a TFSA, staying informed through market news, and engaging on financial platforms. These build real-world confidence and knowledge.

The first year of managing money is about thoughtful choices - taking time before spending, weighing alternatives, and learning to say no even when it's difficult. Whether it's R5 or R500, the habits you build now lay the groundwork for future financial confidence.

*Satrix is a division of Sanlam Investment Management