SURVEY: What's keeping millennials from financial freedom?

A group of friends taking a walk
A group of friends taking a walk

The Old Mutual 2017/2018 survey was conducted to provide insight and understand the spending behaviour of employed millennials versus older generations. 

According to the managing director of Old Mutual Unit Trusts, Elize Botha the results from the survey showed that "millennials born between 1982 and 2000 were more likely to seek financial independence and personal fulfillment, compared to older generations." 

But it's still a struggle that's sometimes all too real.

Elize gave four main reasons that explain why millennials are struggling to attain financial freedom. 

READ MORE: Should you ever take out a personal loan for a vacation?

1. Debt

Millennials have high levels of debt and their debt mostly consists of personal loans to "buy things that will be consumed - like appliances, clothes, or items that tend to depreciate over time," according to Old Mutual. Elize advises to never spend more than what you earn. Don't live above your means.  

2. No investments

The survey found that a considerable number of millennials have a savings account, yet they don't have an investment account. There is a difference between saving and investing and Elize notes that bank accounts do not offer enough growth to beat the inflation rate while investment accounts do. Investing will help you create a second source of income that can add to your salary.

READ MORE: Are your parents like Meghan Markle's dad and feel entitled to your salary or success?

3. Overspending to look rich

According to the survey, millennials buy things to up their status. These items, like shoes and watches, are usually bought on credit so that they can appear successful. 

4. No goal setting

Millennials are not setting clear and defined goals for their finances. As a result, they end up spending instead of saving. By setting goals one can avoid using credit to buy something you don't need.

Here are some more results from the survey: 

What can we take from this survey?

Start thinking of investing your money rather than saving and avoid debt as much as possible. 

There are a number of investment companies that help first-time investors start the journey. They provide a lot of guidance and help you choose a plan best suited for you. 

Here are some you can look into:  

Old Mutual offers tax free investments which can be great for first time investors and you start your investment from R200 per month. 

With Allan Gray you can open up a basic unit trust from R500 per month and you can access your money at any time without paying extra fees. 

Sanlam offers tax-free and standard unit trusts from R500 per month. They guarantee that your money will be protected against a fall in the value of a single share.

WATCH: Eight Beginner Questions & Answers About Investing

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